Melbourne Officials Advocate for Data Center Regulation
Melbourne's Lord Mayor has requested improved management of the environmental impact caused by data centers, characterizing their expansion as a significant development for energy systems. The City of Melbourne council unanimously voted to explore the responsible use of AI infrastructure and data centers, citing concerns over their substantial energy and water consumption.
Growing Environmental Concerns
Documents indicate that Greater Western Water is evaluating 19 data center proposals that collectively request 20 gigalitres of water annually. This volume is equivalent to the amount consumed by 330,000 Melbourne residents in the previous financial year, or 4% of Melbourne's total water usage.
Nicholas Reece, who introduced the council motion, stated that the increase in data centers is the most impactful development for energy systems since the 1950s introduction of air conditioning. He emphasized the current lack of adequate regulatory frameworks for managing their energy and water use.
"The increase in data centers is the most impactful development for energy systems since the 1950s introduction of air conditioning."
The Australian Energy Market Operator (AEMO) forecasts that data centers will account for 19 percent of Melbourne's electricity grid use by 2050, an increase from 2 percent in 2025.
Melbourne Water issued a warning in December, noting that hyper-scale data center applications projected water demands that could exceed those of nearly all top 30 non-residential customers in Melbourne.
Call for Government Action and Policy
The City of Melbourne's motion calls for advocacy to the Victorian and federal governments to establish regulatory frameworks and transparent monitoring requirements for data centers. This would enable local governments to measure their water consumption, energy use, and greenhouse gas emissions.
This development occurs as the Victorian state government aims to position the state as a leader in the ethical adoption of AI. Last year, the government allocated $5.5 million for a "Sustainable Data Centre Action Plan" and expressed a desire to attract more data centers to Victoria, citing available land, energy, and talent. The state government estimates that planned data center projects could represent up to $25 billion in capital expenditure.
Despite acknowledging data centers as an economic driver, the Lord Mayor stated that projects require responsible and well-planned consideration, advocating for the use of renewable power and sustainable water management plans. Approximately 20 data centers are located in the City of Melbourne.
"Projects require responsible and well-planned consideration, advocating for the use of renewable power and sustainable water management plans."
State vs. Local Approaches
Deputy Lord Mayor Roshena Campbell criticized the state government for granting ministerial approval to a new $2 billion NextDC digital hub in Fishermans Bend without comprehensive sustainability or planning policy guidance. She noted that such decisions are being made absent clear policy.
Hume council, located in Melbourne's outer north, also voted to develop a framework for assessing data center applications to ensure sustainable resource use, becoming the first Victorian council to do so.