Victoria’s digital economy is driving a rapid expansion of data centre development across the state, particularly in Melbourne’s west. While these facilities are critical digital infrastructure that support cloud computing, artificial intelligence and economic growth, their scale is creating new and significant challenges for planning, energy systems, water security, and climate policy.
Victoria is experiencing rapid growth in hyperscale data centre developments, particularly in Melbourne’s west. While important for the digital economy, these facilities place unprecedented demands on electricity, water, and land resources of a scale not previously seen. Current proposals in the West represent at least 3GW of electricity demand in the Wyndham area alone, comparable to the combined generation capacity of Loy Yang power stations that provide nearly half of Victoria’s electricity requirements. The existing planning framework was not designed to assess data centres at the scale and pace that they are being proposed. It does not adequately assess the individual and cumulative impacts on energy use, greenhouse gas emissions, essential infrastructure investment, water security, urban heat, or community wellbeing. Without reform, continued approvals risk undermining Victoria’s legislated emissions reduction targets and climate adaptation actions, and creating significant long-term risks and costs for Government and communities.
Victoria has an opportunity to establish a world-leading framework for climate ready data centre development. Clear policy settings, transparent reporting, and state-led coordination can support digital growth while protecting communities and ensuring alignment with climate objectives. Strategic investment in renewable energy, energy storage, and robust planning controls will reduce future infrastructure costs, improve environmental outcomes, and provide greater certainty for industry and government.
The Western Alliance for Greenhouse Action (WAGA) respectfully acknowledges and recognises the Woiwurrung, Bunurong, Wadawurrung and Dja Dja Wurrung people of the Kulin Nation as the Traditional Custodians of the land on which we work and we pay respect to their Elders, past, present and future.