Two separate proposals for large gas-fired power stations in the New South Wales Southern Highlands that would supply energy to data centers have been announced. Both projects are in early stages of regulatory assessment and have raised environmental, economic, and community concerns.
Cloud Carrier Project: Moss Vale
Cloud Carrier, a Sydney-based company, has proposed building three data centers and a 700-megawatt (MW) gas-fired power station near Moss Vale. The power station is planned to feature 21 reciprocating engines capable of generating enough electricity for approximately 70,000 homes. The full data processing complex is anticipated to be operational within five to eight years.
"Pipeline natural gas is currently the most suitable fuel for reliability and economic reasons." — Greg Jackson, Lead Engineer
Energy and Environmental Plans: Greg Jackson, Cloud Carrier's lead engineer, stated that pipeline natural gas is currently the most suitable fuel for reliability and economic reasons, with plans to transition to renewable fuels as they become available. The project intends to use a chip-cooling system that recycles water harvested on-site, eliminating the need for town water. The company plans to treat emissions to remain within the NSW Environment Protection Authority's limits.
Expert Commentary: Professor Toby Walsh, an AI expert, highlighted the significant physical infrastructure and energy requirements of AI services and advocated for responsible deployment. Environment Minister Penny Sharpe noted NSW's interest in data center investment. Ty Christopher, Director of Energy Futures at the University of Wollongong, expressed concern that direct gas-fired electricity generation for data centers would hinder progress towards net zero emissions. A report by Baringa consulting firm projected that data centers could consume 11% of Australia's energy and increase nationwide emissions by 14% by 2035. Professor Walsh also emphasized the importance of onshore data centers for sovereign data control.
Community and Regulatory Response: Local residents, including Jessica Ryall, expressed concerns specifically about the attached gas plant, citing potential issues with pollutants, emissions, and vibrations. The community group Southern Highlands Matters has also voiced preliminary concerns about the project's location, emissions, and pollutants. A NSW upper house inquiry into data centers has been announced, with hearings scheduled to commence in May. The Cloud Carrier proposal is currently in the early stages of the State Significant Projects pipeline, and an Environmental Impact Statement is pending.
Energy Australia Project: Marulan
Energy Australia has submitted a modification application to expand the planned Marulan gas-fired power station from 800 MW to up to 1.4 GW. The original approval was granted in 2009, but construction has not begun. The new proposal includes two open-cycle gas turbines for peaking power generation, with operations expected by 2032.
"The plant will operate only when renewables are insufficient to support the grid." — Matthew Poole, Project Manager
Key Details:
- The plant would be Australia's largest gas-fired power station, surpassing Torrens Island (currently 800 MW) and Colongra (724 MW).
- The expansion is partly driven by forecast demand from data centers; 90 data centers are operating in NSW with more in planning.
- Energy Australia's project manager Matthew Poole stated that the plant will operate only when renewables are insufficient to support the grid.
- The final size of the project is yet to be decided, but it would involve billions of dollars in investment.
- The plant will connect to the Moomba to Sydney Pipeline, located about 7 km south of the site.
- A 20% domestic gas reservation was announced in the federal budget, effective mid-2027, to secure gas supply.
Background and Expert Observations: As coal-fired power stations retire, the Australian Energy Market Operator (AEMO) data shows about 6,800 MW of new gas-fired generation is in the pipeline to replace 6,000 MW of coal capacity. Energy consultant Geoff Bongers from the University of Queensland expects more large-scale gas projects, but notes tension between gas availability and usage. The cost of gas in Australia is three to four times higher than in the US and Qatar, as noted by Bluescope CEO Tania Archibald. Ty Christopher questioned the economic viability of running such a large facility as a peaking plant. Energy Australia cited the performance of its Tallawarra B plant (320 MW, 150 starts in first year) in response to profitability questions.
Regulatory Status: The modification application is being assessed under the Environment Protection and Biodiversity Conservation Act by the federal Department for Climate Change, Energy, the Environment and Water. Public exhibition is expected around October.