‘Too much heat’: How residents beat a $1.2b data centre

Goodman Group’s plan for a $1.2 billion data centre in Lane Cove West drew 374 public submissions. Nine were in favour.

On Monday, Australia’s biggest listed property company gave up. It told the NSW planning department it would no longer pursue Project Mars, a 90-megawatt facility that would have sat about 20 metres from the nearest home and 160 metres from Lane Cove West Public School.

Goodman’s letter said the policy and regulatory environment for large data centres had “evolved significantly”, and that it had weighed those changes against the views of the local community.

Project Mars is the third data-centre proposal withdrawn in Australia in five months. Community campaigns sank the $600 million GreenSquare project in the Perth suburb of Hazelmere in May, and a proposal in Katoomba in the Blue Mountains in June. Meanwhile, other developers are digging in: AirTrunk is actively scaling up its planned 1.2-gigawatt campus at Kemps Creek in Sydney’s west, despite similar community backlash.

Sydney alone has 41 state-significant data centre projects in the pipeline, 18 already approved. Anthropic is negotiating a $21 billion commercial deal with private developers to make Australia a regional hub for running its AI inference models.

The computing infrastructure to power artificial intelligence the industry wants has to be built next to someone. If the neighbours can now stop it, where it goes has suddenly become a multibillion-dollar national problem.

Sasha Titchkosky, a spokeswoman for the Lane Cove Responsible Planning Group, said she was “ecstatic”. She credited six months of campaigning, a run of bad press for Goodman, a shareholder resolution the group lodged last week, and the Senate hearing that followed.

“Last week was really the straw that broke the camel’s back,” she told this masthead. “It was just too much heat.”

The campaign had been building since at least May, when the group’s petition passed 1134 signatures and its members gave evidence to the NSW parliament’s data centre inquiry. Stefano Lauria, one of the residents who first contacted this masthead, wrote then that he worked in AI himself. The group was not opposed to data centres in principle, he said, only to this site.

At the federal Senate inquiry’s first public hearing last week, Liberal senator Sarah Henderson told Goodman’s general manager of developments Ben McGilp that the proposal showed “contempt for local residents” and asked him to withdraw it on the spot. Goodman withdrew it five days later.

The state’s utilities also had their doubts. Sydney Water said it could not support the project without more detail on its water demand. Ausgrid raised electrocution and fire risks. The plans included a million litres of diesel stored on site.

Titchkosky said the business park was built for light industry, and data centres are nothing of the sort. They run diesel back-up generators and emit noise “24 hours a day, seven days a week”, she said.

For most of this year the industry has argued that Australian anger is borrowed. Belinda Dennett, chief executive of Data Centres Australia, said in a March speech that the local debate was being fought on America’s facts. The US has about 5400 data centres; Australia has 252.

Titchkosky called the industry’s early response, that there was “nothing to see here” because Australia had always had data centres, “really disingenuous”.

Dennett struck a different note on Tuesday. “The policies under which developers commenced approval processes are changing. Community expectations are also changing,” she told this masthead.

Community backlash against data centres has already reached fever pitch in the US. A Gallup poll in March found 70 per cent of Americans opposed a new AI data centre in their own neighbourhood. In July, New York Governor Kathy Hochul imposed the first statewide pause on large data centre permits. Texas followed in August, freezing new approvals until its grid is audited. Dennett warned that until governments settle the rules, more data centre customers, investors and developers are likely to “adopt a wait-and-see approach to Australia”. Her group supports a national approach to regulation, more engagement with communities, and faster approvals. “But data centres’ customers and investors have choices, and many countries are actively encouraging investment,” she said.

Victoria is moving to require 150-metre buffers between data centres and homes. NSW has introduced a 75-day fast track for projects that fund their own extra water and power supply. It sets no minimum distance from anyone’s house.

Titchkosky wants siting rules based on evidence. She also wants designated data centre precincts, with the infrastructure, probably including recycled water, built in from the start.

“Just siting them anywhere where there happens to be a power connection is really not the right way to go about this,” she said. “It’s giving the industry a bad name and really impacting the social licence of the industry.”

The international consultancy CT Group has already told its clients that local opposition is now the decisive risk in getting a data centre built. The Lane Cove group belongs to a national alliance of communities fighting data centres.

Titchkosky said Monday’s result had given the others “some energy and some hope”.

Her neighbours are planning a street party once one of their core organisers gets back from holiday. Titchkosky has a test for the next developer eyeing a business park beside homes. “Proponents should ask themselves, if I was in the residents’ shoes, would I want that data centre built there?” she said.

“If it’s so hard to explain, and if you can’t enunciate the benefits, then maybe that is an indication that the data centre doesn’t belong there.”

It’s a question her neighbours will likely be asking again soon. Up the road from where they are planning a party, AirTrunk is still seeking approval for a 37-metre, 140-megawatt data centre on Mars Road.

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