Data centres have public legitimacy. Their growth model does not yet have public trust.

The 2026 NSW Parliamentary Inquiry into Data Centres highlights a significant shift in focus. Questions are increasingly being raised about how data centres are being developed and how planning systems respond to the cumulative effects of expansion. This includes questions about electricity demand, water use, land availability and the concentration of development within specific precincts.

Infrastructure NSW notes that Australian Energy Market Operator (AEMO) forecasts energy consumption from data centres could double by 2030, reflecting the rapid demand for digital infrastructure. NSW is among the most active jurisdictions for data centres globally, with 90 data centres in operation. In March 2026, 15 data centre projects worth AUD $29.4 billion were in the State Significant Development planning pipeline, illustrating the scale of growth being planned.

Planning frameworks are increasingly being asked to demonstrate that impacts are being assessed transparently and managed over time.

Attention is increasingly turning to the planning model behind data centre development. Stakeholders are examining where development occurs, how benefits are shared and how long-term impacts are considered. The next phase of data centre development will depend less on the approval of individual facilities and more on how governments, infrastructure providers and developers plan at a precinct scale. Communities want to understand what the future of an area looks like, not simply assess one project at a time.

Infrastructure approvals often occur one project at a time. Communities experience changes very differently.

For residents, businesses and local governments, growth is rarely defined by a single development application. It is experienced through a combination of new facilities, supporting infrastructure, construction activity, changing land uses and increasing demands on local services. This dynamic becomes more apparent when multiple data centres are proposed within the same precinct.

A single facility may have limited impacts in isolation. Communities, however, often evaluate the combined effect of several developments operating within the same area. Traffic movements, visual impacts, power infrastructure, construction activity and supporting services can shape perceptions of growth and influence whether it is considered acceptable.

Planning systems frequently assess individual projects. Communities tend to experience the cumulative effect of change across an entire place.

As data centre clusters emerge, attention naturally shifts from the impact of a single project towards the long-term direction of a precinct. Questions arise about what long-term change will look like, how infrastructure networks will adapt and whether communities have visibility of the longer-term development trajectory.

Similar conversations have emerged across transport, water, energy and major urban development projects. What makes the data centres different, is the pace of investment and the concentration of development in specific locations.  

Electricity and water are attracting increasing attention as data centre investment expands.

This increase is driven by the rapid adoption of AI technologies and growing reliance on cloud-based computing services.

Demand for data centres is expected to increase significantly over the coming decade. According to AEMO, data centres consumed around 4 TWh of electricity across the National Electricity Market (NEM) in 2024-25, representing approximately two percent of grid-delivered electricity supply. Under AEMO's Step Change scenario, consumption is forecast to grow to 21.4 TWh by 2034-35, or around nine percent of the NEM's grid-supplied electricity, reflecting the growing uptake of AI technologies and cloud-based computing services.

These discussions often start as technical infrastructure questions. They quickly become questions of public trust. As facilities become larger and more numerous, governments, utilities, communities and investors all have an interest in understanding how future demand will be accommodated and how supporting infrastructure will be funded and delivered.

For communities, concerns about electricity and water extend beyond engineering performance. They connect to wider questions of affordability, reliability, resilience and long-term resource security. As demand grows, people naturally want to understand where additional capacity will come from, how competing needs will be balanced and how decisions are made.

The 2026 NSW Parliamentary Inquiry into Data Centres highlighted growing scrutiny of electricity and water demands as the sector expands. Evidence presented throughout the inquiry reflected increasing attention on energy efficiency, cooling technologies, alternative water sources and the long-term stewardship of shared resources. Public confidence is closely linked to whether communities can see that development is being planned transparently and managed in the broader public interest. 

Data centres do not operate independently of the networks around them. Their performance depends on electricity, water, telecommunications, transport connections and a range of supporting infrastructure systems. Decisions made within one network can influence investment requirements and operational outcomes across several others. The interconnected nature of these systems is increasing the need for integrated planning.

A precinct-wide perspective creates opportunities to understand where demand can be accommodated, where constraints may emerge and how infrastructure investment can be coordinated across sectors. It enables governments, infrastructure providers and developers to identify future pressures earlier and respond before they become barriers to growth. It also supports more informed conversations with communities.

When people understand how individual projects fit within a broader infrastructure strategy, discussions are more likely to focus on long-term outcomes rather than individual developments in isolation. Greater visibility of the bigger picture can help create confidence that growth is being managed deliberately rather than occurring incrementally. This is particularly important in locations where multiple developments are expected over time.

The expansion of data centres presents substantial opportunities for economic growth, innovation and digital capability. While data centres play an increasingly important role in modern society, debate continues about how their continued expansion should be managed. It involves building confidence in how growth is governed, how cumulative impacts are understood and how infrastructure systems work together to support communities, economies and investment.

Success will increasingly depend on how planning systems, infrastructure investment and precinct development is coordinated over time.

The jurisdictions that are best positioned to support continued investment are likely to be those that provide greater visibility of development patterns. That means planning for data centres at a precinct scale, identifying infrastructure requirements early and creating clear pathways for how electricity, water and transport networks will respond as demand increases.

It also means engaging communities in conversations about the future, rather than consulting on individual projects in isolation. When people see how development fits within a broader strategy, confidence is more likely to be built around both the process and the outcome.

The most resilient planning models provide certainty for investors while giving communities confidence that decisions are coordinated, transparent and aligned with broader regional objectives. As Australia expands its digital infrastructure, trust will increasingly depend on whether communities can see how growth is planned, how impacts are managed and how decisions serve the broader public interest.