A NSW parliamentary inquiry has called for a moratorium on new AI data centre approvals, warning that the current rules are inadequate and that communities are not being heard.
The Upper House Public Accountability and Works Committee tabled its report on Thursday 5 November. The inquiry received 143 submissions, held five public hearings and visited a data centre. It heard from residents, local councils, policy think tanks, academics, industry representatives and government agencies.
The report makes 26 recommendations to the State Government. It focuses on ensuring approval processes properly address cumulative impacts and the concerns of residents and experts. It also examines the existing planning framework, the energy and water needs of data centres and their broader societal impacts.
Committee chair Abigail Boyd said the inquiry came “in the midst of an AI-fuelled data centre frenzy” that was placing increasing pressure on shared energy and water resources. She said there were no binding requirements on this class of development to address those concerns, and that host communities were worried about the State Government’s pro-data centre approach.
Ms Boyd said proposals were being approved too quickly and without adequate information-sharing or consultation. She also said the inquiry’s work was hindered by key participants from the data centre and AI industry, and the State Government, who failed to provide submissions or refused to appear as witnesses.
“This is intolerable, and urgent reforms are required,” she said.
The findings land as the Hunter becomes a focus for the industry. A $10 billion data centre and battery project has been proposed on Malabar Resources land between Muswellbrook and Denman, and AirTrunk has proposed a 540-megawatt data centre at the former aluminium smelter site at Kurri Kurri. Origin Energy is also assessing the potential for a data centre at Eraring.
Muswellbrook Mayor Jeff Drayton has previously said the council is open to investment, but that any proposal must show long-term value and responsible use of energy and water.
