Datacentres in Victoria to be banned in residential areas

New state government regulations prohibit datacentres from being located in residential zones, requiring that any new facility adopt renewable energy sources and demonstrate tangible contributions to the community.

Premier Ben Carroll is scheduled to announce the sustainable datacentre action plan on Tuesday following cabinet approval yesterday.

The authorities claim these guidelines represent the strongest and clearest framework for datacentres across the nation.

“In Victoria, we set the rules – datacentres must power themselves, protect homes and pay their way,” said Carroll ahead of Tuesday’s reveal.

“If we get that right, we can all share in their economic benefits, particularly the local community.”

These regulations ban datacentres from siting near schools, early‑childcare centres, and rural zones lacking sufficient capacity, while enforcing a minimum 150‑metre buffer around newly developed housing areas.

Operators must generate their own renewable power and assume responsibility for grid connection fees and targeted network upgrades.

In addition to clean‑energy sourcing, datacentres are expected to use reclaimed or non‑potable water for cooling or secure verified offsets for water consumption.

The scheme also obliges new sites to provide a “local investment guarantee,” potentially involving employment schemes, public amenities such as parks, and commitments to hire and train Victorians both during construction and thereafter.

Fair community consultation is now mandated alongside existing noise thresholds, fire‑safety standards, and broader risk‑management requirements.

The legislation also restricts locations in proximity to schools and childcare services, and prohibits new installations in rural municipalities that lack the infrastructure to support such facilities. A compulsory 150‑metre separation between any new development and adjacent residences is now required.

Datacentres must cultivate their own renewable energy supply and fund connection costs and network enhancements accordingly.

They are further asked to employ recycled or non‑drinking water for cooling processes or achieve recognized offsets for water usage.

Beyond site specifications, the plan demands “fair community consultation” procedures, preserved noise limits, enhanced fire safeguards, and standard safety protocols.

Federal leadership previously sought a nationwide requirement for renewables, a move that stalled after opposition from Queensland and Northern Territory premiers.

Last year, former Primer Jacinta Allan pledged to establish Victoria as the nation’s datacentre hub.

Rising community pushback in the run‑up to the November election, particularly in Labour seats, has intensified. For example, Footscray—held by Kate Hall with a narrow 4.2 % margin—is home to NextDC’s Footscale‑class facility (M3), zoned industrially yet abutting dozens of residential dwellings less than 15 metres away.

Lady Hall leads criticism of the datacentre expansion amid strong opposition, framing it as a threat to neighbourhood character.

NextDC has also submitted expedited state approval to extend the Footscray plant to ten hectares, drawing twenty‑five megawatts and operating continuously, despite zoning restrictions nearby.

Labor member for Lara, Ella George, raised concerns about NextDC’s recent 169‑hectare land purchase outside Geelong—a parcel originally set aside for suburban development.

Other developers face scrutiny: Synclone Energy plans a massive 350‑square‑kilometer, 2.4 gigawatt installation in Plumpton, outer north‑west Melbourne. Federal Labor deputies Alice Jordan‑Baird and Sam Rae oppose the proposal, calling it disproportionately large compared with current Australian capacity.

That project would dwarf any active datacentre today and demand electricity generation exceeding Victoria’s flagship plant, Loy Yang A.