13 April 2026
Sydney’s northern councils have warned that 27 data centres are already operating or planned across their region, urging the NSW Government to impose stronger planning controls as development accelerates.
In a submission to the NSW Legislative Council inquiry into data centres, the Northern Sydney Regional Organisation of Councils (NSROC) — representing Hornsby Shire, Hunter’s Hill, Ku-ring-gai, Lane Cove, Mosman, North Sydney, City of Ryde and Willoughby — said the scale and concentration of projects is creating mounting pressure on land, energy and water resources.
NSROC said publicly available data shows more than 90 facilities are either operational or proposed across Greater Sydney, with 27 of these located within its member council areas, particularly in Ryde, Lane Cove and Willoughby.
The organisation said these developments are increasingly clustering in key employment zones, including Macquarie Park and Artarmon, where they are competing with other commercial and industrial uses.
Within the NSROC region alone, existing and planned data centres already exceed 1,000MW of capacity, underscoring the scale of infrastructure demand now being placed on electricity and water networks.
NSROC said it supported investment in data centres and AI infrastructure but warned that the pace of rollout was outstripping existing planning frameworks.
It called for the development of a clear state-led spatial strategy to identify preferred locations for data centres, aligned with available energy, water and fibre infrastructure and broader land use objectives.
“Data centres should be planned in a comparable way as part of an integrated suite of digital and economic infrastructure,” the submission said.
The councils argued that without such direction, development decisions would continue to be driven by short-term commercial considerations rather than long-term economic and social outcomes.
Environmental impacts were a central concern, with NSROC noting that data centres are significant consumers of electricity and water. It cited estimates that data centres account for around 2% of Australia’s electricity consumption, with demand expected to rise sharply as AI workloads grow.
Sydney Water has projected that AI-driven demand could require an additional 250 megalitres of water per day by 2035, highlighting the potential strain on urban water systems.
NSROC warned that this growth could undermine local and state net zero commitments unless stronger performance standards were introduced, including requirements for energy efficiency, water use and monitoring.
The submission also raised concerns about the displacement of employment-generating land uses, arguing that data centres deliver relatively limited ongoing jobs compared with other industrial or commercial activities.
It called for more detailed analysis of the sector’s economic contribution, including productivity gains and workforce impacts, to better inform planning decisions.
On funding, NSROC said data centre developers should bear the full cost of connecting to and upgrading energy and water infrastructure, as well as remediating any impacts on local infrastructure.
“Local communities should not bear the cost of these impacts,” it said.
The organisation also called for greater local government input into planning decisions, noting that most large data centres are currently assessed as state significant developments, concentrating approval powers at the state level.
It further highlighted gaps in governance around long-term site management and decommissioning, arguing more work is needed to understand lifecycle impacts and ensure appropriate remediation requirements.
NSROC said it would continue to work with the NSW Government to develop a more coordinated approach that aligns infrastructure investment, protects employment lands and delivers broader economic and community benefits from the growth of data centres across Greater Sydney.