NSW inquiry recommends strict data centre rules

A NSW parliamentary inquiry has recommended Australia's strictest renewable energy rules for new data centres, citing environmental and economic concerns.

The report, released by a committee including three government MPs, criticized the state's fast-tracked planning process for data centres.

More than 60 data centres operate or are under construction in NSW, with many located near residential areas in Sydney.

Treasurer Daniel Mookhey previously announced guidelines requiring data centres to offset energy demand with additional power and water.

The inquiry's 23 recommendations include assessing the cumulative impact of data centres on an area, rather than individual projects.

Chair Abigail Boyd, a Greens MP, described the scale of planned data centres as 'astonishing' and warned of their energy and water demands.

The report called for data centres to supply 100% renewable energy hourly, a stricter standard than current regulations.

Current rules allow around 20% of data centres' energy needs to come from coal and gas, according to Ms Boyd.

The inquiry also recommended tracking how much revenue from data centres remains in Australia versus being sent abroad.

Additionally, the report urged NSW to advocate for stronger national copyright laws amid concerns about AI's impact on the creative industry.

Australian Writers' Guild leader Claire Pullen warned that generative AI is using copyrighted work without consent, threatening the industry.