Do you want a Data Centre near your backyard, even though you know it is an important piece of infrastructure? That is a question facing Lane Cove residents and nearby suburbs.
The number of Data Centres in Australia is growing. The Data Centre growth is being driven by the need to keep up with the evolution of Artificial Intelligence (AI). Data Centres and AI go hand in hand. Platforms such as ChatGPT, Perplexity, Gemini, and Co-Pilot are being used more every day. Some companies (such as Shopify) have told their employees that the use of AI is a “baseline expectation”.
As of 21 January 2025, the United States leads with the most data centres in the world. They. Have 5381 data centres. Australia is seventh on the list of top countries with the most data centres, with 307 data centres.
How Many Data Centres are in the Lane Cove Council Area?
The Data Centres listed below have been built or are planned in Lane Cove Local Government Area and its adjoining suburbs. This list only includes data centres that are state-significant developments (there could be smaller data centres that have been approved by local councils).
Data Centres in Operation
Next DC Artarmon
Airtrunk Lane Cove West Business Park
Proposed Data Centres
12 Mars Road Lane Cove (being called Project Mars). See our cover photo.
6 – 8 Julius Avenue North Ryde. –
Read our article here about these proposed data centres.
Proposed Data Centre That Did Not Proceed
Microsoft Data Centre Lane Cove North Mowbray Road (near Rotary Field)
Is it the State Government or Local Councils that Approve a Data Centre’s Development Application?
In June 2021, the State and Regional Development SEPP was amended to temporarily allow more warehouses and data centres to be assessed as state-significant development (SSD).
Including data centres as SSDs was considered a temporary measure to stimulate construction and support NSW’s economic recovery from the COVID-19 pandemic, but this measure remains in place.
The approval pathways for data centres are:
- Data centres that have a total power consumption of more than 10 megawatts (or 15 megawatts from 1 June 2023) are SSD. SSD applications are lodged to the Department of Planning, Housing and Infrastructure and determined by the Independent Planning Commission or the minister.
- Data centres that do not meet the SSD criteria and have a CIV of more than $30 million are regionally significant development (RSD). RSD applications are lodged to councils and determined by a Sydney district or regional planning panel.
- Data centres that do not meet the criteria for RSD or SSD are local development. Local development applications are lodged to and determined by councils.
The Data Centres that have been built or are in the planning stage in the lower north shore have been a state-significant development.
The Lane Cove Council has not been the approval authority for these data centres and can only provide feedback on the proposal.
In NSW, Where are Data Centres Usually Located?
Data centres are permitted with consent in the following zones (or equivalent zones) across NSW:
- B5 Business Development
- B6 Enterprise Corridor
- B7 Business Park
- IN1 General Industrial
- IN2 Light Industrial
- IN3 Heavy Industrial
- E3 Productivity Support
- E4 General Industrial
- E5 Heavy Industrial
A local environmental plan may also make data centres permissible in zones other than those listed above.
The Lane Cove LEP does not permit Data Centres in any other zones.
Due to the above zones, a Data Centre would not be permitted to be constructed in a residential area in Lane Cove.
However, in Lane Cove, the Lane Cove West Business Park is located near a residential zone. The only buffer is the C2 environmental zone. The C2 Environmental Conservation zone is used to protect areas that have high ecological value and significance. The C2 zone, therefore, has very limited permissible uses and development potential.
Data Centres are not usually located near or close by to residential housing.
Earlier this year, the state government prohibited data centres from being built in the Macquarie Park Business Centre. The State Government was of the view that this area could be used for residential housing to help solve the current housing crisis.
This action was criticised by the Property Council of Australia, which is at the forefront of data centre construction. The NSW Executive Director, Katie Stevenson, issued a press release asking for the NSW government to stop ad hoc planning decisions and to develop an NSW Data Centre Strategy.
“That’s why today we are calling on the Premier to lead the development of an NSW Data Centre Strategy – one that brings industry, government, utilities, and investors together to secure our future digital infrastructure.” Said Katie Stevenson
“Data centres are the backbone of the digital economy – but without a clear and tailored strategy from government on where they should go and how infrastructure challenges will be managed, NSW risks falling behind,” Ms Stevenson will say.
At the June Lane Cove Council Meeting, a resolution was passed asking the State Government to involve local government more in the planning of data centres.
Not In My Backyard
Two Days after the United States President Donald Trump started his second term, he announced the Stargate Project, where a joint venture will build up to 20 large data centres in the USA.
After this announcement, HostingAdvice ( a US tech Industry Online publication) commissioned a survey to ascertain what US citizens felt about having a data centre located in their residential area. The survey participants were mainly from the US States where the new large data centres were to be built.
The survey response revealed:
“Even though most Americans agree that AI technology is important for the country, they don’t want a data centre in their neighbourhood. Only 35% of those surveyed would vote “yes” to one being built in their hometown.
This shows a split in thinking: Americans see these data centres as a national need, but not as something that benefits their local community. However, this presents a big opportunity for the government, tech companies, and data centre builders to change people’s minds.”
In July 2025, the Gerald R. Ford School of Public Policy at the University of Michigan released a report – What Happens When A Data Centre Comes to Town. You can read the report here. The report’s main aim was to investigate if tax incentives to build data centres are good public policy; however, it also provides a summary of the issues that arise at the local level when a data centre is planned near residential communities.
In Australia, tax incentives/tax breaks for data centre developers and operators are more likely to be policy at the Federal Government level. In Australia, there are tax incentives such as Research & Development tax incentives and the proposed clean building managed investment trust withholding tax concession to data centres and warehouses.
The report included the following public policy recommendation:
“For states that have not passed data centre tax breaks, the simplest policy recommendation is to avoid implementing such incentives in the first place. Legislators should refrain from passing laws that grant tax breaks to data centres, as these incentives often fail to deliver promised economic benefits and impose significant costs on state and local budgets. Despite claims of job creation, data centres typically generate few permanent positions relative to the scale of public subsidy they receive. The high energy consumption and environmental impact of data centers can strain local infrastructure and undermine climate goals. Redirecting public resources toward initiatives with more substantial and equitable economic returns, such as education, workforce development, or renewable energy, offers a more responsible and effective use of taxpayer dollars.”
In 2023, the Virginia Joint Legislative Audit and Review Commission directed staff to review the impacts of the data centre industry in Virginia, USA.
You can read the full report here. The report specifically looked at the impact of data centres near residences. The report noted:
“The industrial scale of data centers makes them largely incompatible with residential uses. One-third of data centers are currently located near residential areas, and industry trends make future residential impacts more likely.
Inadequate local planning and zoning have allowed some data centers to be located near residential areas, which sometimes causes impacts on those residents. In some cases, this occurred because local zoning ordinances did not consider data centers to be an industrial use. In addition, some localities have zoned industrial areas next to residential areas, even though land use principles state that industrial uses and residential uses should not be zoned next to each other. Local elected officials have also granted data centers exceptions that led to adverse residential impacts, such as approving rezonings that would allow data centers next to sensitive locations.”
In a nutshell, local communities are concerned about several issues, including electricity outages, water shortages, environmental impact, electromagnetic radiation, noise from generators, fire risks from diesel tanks at data centres, and the effect on them during the construction phase. For example, the proposed data centre at Mars Road, Lane Cove West, will take two years to build.
Local Council’s Involvement
The State Government wanted to fast-track Data Centre developments, so Local councils, such as the Lane Cove Council, have been sidelined in the development application process. They are not involved in community participation and have little say on how a developer can engage with the local community to understand their concerns.
However, by removing the planning process from local councils, issues have arisen because councils are no longer involved in discussing crucial infrastructure requirements, such as electricity demands and water supply needs, and the impact on their residents.
Community Engagement
Bronwyn Cumbo is a transdisciplinary social researcher and lecturer at the University of Technology Sydney. Her research focuses on the digital-environmental transitions, and how local communities, government and industry can work together to understand complex challenges, and design desirable and sustainable AI futures.
Bronwyn recently published an article in The Conversation advocating for more community input.
Bronwyn noted that the current state planning system for data centres limits community input. She said there are three key steps that data centre developers and governments can take to ensure “individual developments – and the broader data centre industry – reflect the values, priorities and aspirations of local communities.”
The three steps are
- Developing critical awareness about data centres
- Involving communities early in the planning process
- Creating more inclusive visions of Australia’s data centre industry
Cumulative Impact of Data Centres Being Located in the Same Region
Airtrunk has lodged another development application to build another data centre close to its existing data centre. The Department of Planning, Housing and Infrastructure (NSW Planning) requested input from both the Lane Cove Council and Ryde City Council on the new application.
In a letter dated 25 July 2025, the City of Ryde advised NSW Planning:
“City of Ryde Council raises concerns about the growing number of data centres within the Northern Region, resulting in a large cluster of these land uses. It is acknowledged that these land uses drain significant essential resources (electricity/ water). Council recommends that DPHI consider the cumulative impact these land uses have on the already constrained infrastructure of the region.”
Case Study – Impact on Local Community AirTrunk Data Centre Lane Cove West Business Park
In 2021, the 100 megawatt Aritrunk Data Cente opened in Lane Cove West Business Park. At that time, it was one of the largest single-campus data centres in the Asia-Pacific region.
The Development Application was lodged with Planning NSW as a State Significant Development (SSD9741). As part of the process, an Environmental Impact Statement (“EIS”) was submitted in support of SSD9741 Construction of a Data Centre at Lane Cove West. The SSD9741 EIS refers explicitly to both the construction and operation of the data centre.
The EIS included the following:
Para 6.12
“It should be noted, given the scale and nature of the Proposed Development, it will have a minimal impact on existing community and social facilities and that there are no requirements to provide for or contribute to new community or social infrastructure in the local area.”
ITC Comment
The water supply to the Lane Cove West Business Park is limited. The Business park has mainly been light industry without the need for increased electricity and water supply.
As a result of the limited water supply, major work installing water pipes was undertaken around Lane Cove West by Interflow on behalf of Sydney Water.
The work includes digging up the road, installing pipes and large precast concrete forms.
Locals were impacted due to the nature and extent of the works – read our report here.
Para 6.16
“Both Optus and NBN have infrastructure in the vicinity of the Site on Sirius Road and Apollo Place, which may be appropriate for construction and site operations. It is noted that numerous high capacity communications connections to the Site will be needed to support the proposed Data Centre operations.”
ITC Comment
The high-capacity communication connections were underground cabling by clients who use the Data Centre – this resulted in numerous complaints from locals in the Lane Cove Council area, not just Lane Cove West residents. ITC has written numerous articles on this issue, and our reporter, Jack Kelly, was nominated for a Walkley award for reporting on these issues. Read more here about the impact on locals.
Locals have a right to be concerned due to the recent issues with cabling companies installing dark fibre cabling for data centre customers. After the cabling was installed, the contractors left footpaths ripped up and dangerous to use, grass verges dug up, surrounded by orange tape, and water leaks. Read more about the cabling cowboys here.
Part I – Conclusion
“No adverse environmental impacts are anticipated to result from the construction or pursuant operational phases of the Proposed Development. The Proposed Development is also suitably separated from sensitive areas and would be serviced by adequate infrastructure, including a capable road network.”
Data Centre Construction will continue at pace. Is it time for the NSW government to develop a comprehensive plan to ensure data centres are located in light industrial areas or business parks, away from residential areas?
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