Melbourne has surged ahead of Sydney for the first time in the multibillion-dollar race for planned new data centres, as the state capitalises on old manufacturing land to attract the world’s tech giants.
But this unprecedented surge in projects, reshaping suburbs in Melbourne’s west and north-west, has sparked concerns about the impact of these power-hungry facilities on the state’s electricity and water supply.
Economic Growth Minister Danny Pearson told The Age the government wanted to accelerate planning processes to bring more data centres to the state, with cheaper land availability giving Melbourne the upper hand over Sydney.
He said much of the state’s vacant industrial land, a legacy of the manufacturing boom, already had good utility access, positioning Victoria well for the data centre industry fuelled by the artificial intelligence explosion.
“Thirty-five years ago we were seen as the rust-bucket state – as the tariff laws came down, a lot of those industries were no longer viable and shut up shop,” he said.
“I think there’s an opportunity now to have that land repurposed for data centres.”
Pearson said the state currently had about 48 operational data centres, with 20 more yet to come online. These range from massive “hyperscale” facilities built by technology giants like Amazon to smaller “colocated” centres where businesses rent space. Among the most recent to be announced is a $2 billion facility in Fishermans Bend.
Josh Maitland, Colliers Urban Planning director, said Melbourne was “out-competing Sydney at present” due to “advantages in ready land supply, power availability … and faster planning approval processes.”
Data centres are becoming more prolific due to the explosive growth in cloud computing and artificial intelligence tools such as ChatGPT. They look like large industrial warehouses – sometimes tens of thousands of square metres – and house the servers and storage needed to process and manage these vast amounts of data.
The Age
