NT environmental regulator has 'low confidence' in plan for outback data centre

The Northern Territory's environmental regulator says it holds a "low level of confidence" in the environmental planning behind a massive outback data centre.

Energy North has applied to build a hyperscale data centre campus on Murranji cattle station in the Barkly Region.

Called Project Ares, the facility would extract up to 4 billion litres of groundwater annually and require significant on-site power infrastructure.

The NT Environment Protection Authority said, if built, the data centre could have "a significant impact on the environment" and listed 10 potential impacts on air, water, people and land.

Responding to Energy North's environmental management plans in a publicly available document, the NT EPA said there was "insufficient information on most environmental aspects".

It said the regulator was not confident the environmental measures put forward by the company would be effective.

The application has not been rejected, and Energy North will now be required to submit more information in an environmental impact statement (EIS), and the NT EPA will consult further with the public and federal government.

Project Ares will also require assessment and approval from the national EPA before it can proceed.

The Albanese government is working on national data centre standards to be legislated in 2027 as it seeks to balance economic opportunities with environmental considerations.

The new laws could also include mandates to prioritise the use of recycled water and force AI companies to reserve computing capacity for Australian businesses and researchers.

In a separate statement published yesterday, the NT EPA acknowledged this and said the approvals process may be affected by the new laws.

"The Australian Government is developing policy expectations for data centres and AI infrastructure," it said.

"As policy and industry evolve, requirements of proponents and environmental impact assessment processes will also evolve," the statement read.

Environment Centre NT's Bree Ahrens welcomed the NT EPA's decision and said no development should take place until "robust" national laws are in place.

She said the regulator's decision to approach the proposal with "a really high level of scrutiny" was not surprising.

Energy North vice-president Daniel Hunter said the company agreed with the NT EPA's reasoning and said the project should be assessed thoroughly.

"One of the NT EPA's key concerns was that our measures to avoid and manage potential impacts weren't yet developed in detail," Mr Hunter said.

"That's a fair assessment, and it's exactly the gap the EIS is designed to fill, with management plans and specific, measurable commitments, backed by detailed technical studies."

He said Energy North proposed to be assessed via an EIS in its original application.

Mr Hunter said Project Ares would align with the federal government's proposed new laws.

"It will generate all its own power … so it won't draw on the existing electricity grid," he said.

"We know the community has real questions about water and gas. We'll be engaging with the community on those questions, and the EIS will address them in detail."