The Public Service Association of NSW (PSA) supports stronger regulation of the rapidly expanding data centre industry to ensure its growth does not increase electricity costs, threaten water security or shift infrastructure costs onto NSW households and communities. With data centres already accounting for around five per cent of the state’s electricity consumption and proposed connections significantly exceeding current average grid demand, the PSA argues that existing regulatory arrangements are not adequate for the scale and pace of development now being proposed.
The submission calls for data centre operators to meet the full cost of the electricity infrastructure required to support their developments, including necessary network upgrades, renewable energy generation and storage. Operators should also be required to reduce demand during periods of grid stress, meet high standards for water and energy efficiency, and publicly report their performance. The PSA argues these requirements must be enforceable through legislation rather than relying on voluntary agreements or Power Purchase Agreements alone.
The PSA also urges the NSW Government to ensure approved but not yet constructed data centres are captured by new regulatory arrangements where possible, particularly where they may fall outside proposed federal requirements. Broader planning decisions should consider water security, electricity reliability, noise and heat emissions, community amenity and the availability of land for housing. Meaningful community consultation should be embedded throughout the planning and approval process.
While recognising the potential benefits of artificial intelligence and digital infrastructure, the PSA maintains that development must occur on terms that protect the public interest. Data centre growth should deliver fair, safe and secure employment, contribute appropriately to the infrastructure and resources it consumes, and ensure the economic benefits of investment are shared with Australian workers and communities.