Victoria bans datacentres in residential areas, mandates renewable energy and community investment

Datacentres in Victoria will be banned in residential areas and required to use renewable energy and contribute to the community, under new state government rules.

On Tuesday, the premier, Ben Carroll, will release the government’s sustainable datacentre action plan, after it was approved by cabinet on Monday.

The government claims the rules are the “strongest” and “clearest” governing datacentres in the country.

“In Victoria, we set the rules – datacentres must power themselves, protect homes and pay their way,” Carroll said in a statement before Tuesday’s announcement.

“If we get that right, we can all share in their economic benefits, especially the local community.”

The new rules include a ban on datacentres near schools and childcare centres and in rural areas that cannot support them, along with a 150-metre buffer zone between new developments and homes.

Datacentres will be required to source their own renewable energy and will have to pay for connection costs and network upgrades.

They will also need to use recycled or non-drinking water for cooling or offset their usage.

The government said new datacentres will also have to give back to community via a “local investment guarantee”, which could include jobs, Tafes and parks. They will also be required to employ Victorians during construction and train people for long-term jobs when up and running.

The plan also includes mandating “fair community consultation”, as well as existing noise limits fire and safety rules.

The federal government had previously flagged plans to require all new datacentres to be powered by renewable energy rather than coal and gas but was forced to back down on the mandate after opposition from the Queensland and Northern Territory leaders.

Last year, the then Victorian premier, Jacinta Allan, vowed to make Victoria the datacentre capital of the country.

But there has been growing community opposition in the lead-up to the November election, particularly in Labor-held seats.

They include Footscray, held by Labor’s Katie Hall on 4.2% margin against the Greens, who ran a “stop AI data centres day of action” in the electorate on Saturday.

NextDC has lodged an application with the state government for fast-tracked approval to expand its Footscray datacentre, known as M3, to cover 10ha , drawing 225MW of power and running 24/7. Some residential homes are within 15 metres of the datacentre’s boundary, which is zoned in an industrial area.

Hall is a long-term opponent of the datacentre’s expansion.

NextDC has also bought 169ha of land just outside Geelong, which had been earmarked for future residential development. Labor MP for Lara, Ella George, expressed concern about the acquisition to the Age in July.

There are also Syncline Energy’s plans to develop a 350ha, 2.4GW datacentre in Plumpton, in Melbourne’s outer north-west, which is opposed by federal Labor MPs Alice Jordan-Baird and Sam Rae.