Data Centres
The NSW Government supports data centre investment to drive economic growth, job creation and innovation, and strengthen access to reliable digital services for the community.
The Guidelines support data centre investment in NSW while managing impacts to energy and water resources, and protecting the needs of communities, households and businesses.
They call for data centres to pay for the energy and water infrastructure they require and manage the environmental impacts of operations, as the scale of investment in the sector grows.
The Guidelines outline performance measures that are built around 6 principles:
Principle 1
Apply world-class environmental and efficiency standards
Principle 2
Impose no net cost to consumers and communities
Principle 3
Fund additional supply of water and energy
Principle 4
Enhance local community infrastructure and amenity
Principle 5
Invest in future industries across the supply chain
Principle 6
Demonstrate a commitment to training and skills to support jobs
The NSW Government will review these Guidelines annually or as required to respond to material changes in the data centre operating environment to ensure they remain fit for purpose.
The Guidelines build on the principles set out in the NSW Data Centre Consultation Paper released in March 2026 and have been informed by feedback from a wide range of stakeholders.
The 3 pillars reflect a balanced and evidence-based approach that will support investment in NSW while protecting the interests of households, businesses and communities.
The pillars are consistent with the Australian Government's Expectations of Data Centres and AI Infrastructure Developers, published in March 2026.
Pillar 1
The NSW Data Centre Guidelines support planning application assessments
Pillar 2
Regulatory reform to ensure equitable cost recovery for energy infrastructure
Pillar 3
An IPART review to consider the full recovery of costs of water provision to data centre customers
Pillar 2 will enable the NSW Government to progress regulatory reforms to ensure the cost of additional energy infrastructure investment is recovered from data centre operators. Formal consultation is underway to seek public feedback on the reforms. The consultation period will take place from 17 August to 14 September 2026.
Read the Consultation Paper, Reforming electricity network connection and cost recovery arrangements for data centres in NSW.
The NSW Government has introduced a bill to allow for legislative changes to support the actions under Pillar 2.