SYDNEY: The developer of one of Australia’s biggest planned data centres (DCs) has scrapped its target start date after a regulator said it needed longer than usual to set environmental parameters, a setback to the country’s ambitions to be a fast-track destination for artificial intelligence (AI) investment.
Energy North, which said it has development finance for a sprawling gas and solar-powered DC on a cattle ranch in the country’s remote north, 683km from the nearest city, had given a “first power” date of June 28, 2028, in regulatory filings four months ago.
But after the Northern Territory (NT) environment regulator said in an Oct 7 ruling it was suspending its seven-week deadline to decide what hurdles the project must clear, the developer told Reuters it had scrubbed its timeline.
“The June 2028 date in our referral was an indicative schedule, and we’re no longer working to it,” said Energy North vice-president of project development Daniel Hunter in an email.
The project is the biggest in Australia to put back its timing and showed how DC ambitions face hurdles even in the isolated north, which has sought to differentiate itself from cities in the contest for the US$7 trillion McKinsey forecasts will be invested in “AI factories” globally by 2030.
The territory is counting on luring projects with its vast supply of uninhabited land and sunshine: 260,000 residents in an area twice the size of Texas, with as much sun as the Sahara and a huge just-opened shale gas reserve for backup power.
But stopping the clock on Energy North, the territory’s regulator said it would seek advice from the federal government, which is “developing policy expectations for DCs and AI infrastructure developers”, and gave no new timeframe.
Hunter said the project was unfazed and would confirm timing once the regulator sets out terms for an environmental impact statement, required to identify and address potential adverse effects.
He added that the project was funded in the development phase by its founder, with later phases financed “as the project moves through approvals towards a final investment decision”.
At one gigawatt, Energy North’s “Project Ares” is four times the size of a DC expansion in Melbourne delayed last month by developer NextDC due to energy supply concerns and 10 times the size of a project pulled by Goodman in Sydney amid resident pushback.
“Our antiquated planning frameworks weren’t designed for proposals like this,” said Adam Beck, an urban planner, who has written environmental impact statements for infrastructure projects and advises governments.
“Tearing up timelines is kind of standard process, but I’m not going to discount the lack of social licence.
“There is a heightened level of concern by the community, and that’s playing out on real projects.”
In its ruling on Energy North’s proposed 191 sq km DC campus, including a gas turbine system, solar farm, airstrip and accommodation for 4,300 construction workers, the NT Environment Protection Authority warned of 10 impacts, from straining water systems to disrupting Aboriginal sacred sites.
Additionally, it said it had a “low level of confidence in the effectiveness of proposed measures to manage potential significant impact”.
NT Business Minister Robyn Cahill, who has said her government was talking to 12 DC-related projects, didn’t respond to requests for comment.
The gap between hope and reality isn’t limited to Energy North’s project.
Beetaloo Energy has proposed a DC near Darwin, twice the size of Project Ares.
It would use up to 400 terajoules of gas a day, based on an estimate it gave of needing 200 terajoules per gigawatt.
That is 10 times the volume of gas flowing from the Beetaloo Basin’s only producing project, Tamboran’s Shenandoah South.
Furthermore, Beetaloo Energy aims to start producing a small volume by the end of the year.
Just those two DCs would total three gigawatts, about 10 times peak demand on the entire Territory’s grid.
Both companies said their energy would ultimately combine renewables with their own gas-fired power, bypassing the grid. Details of the other 10 Territory projects haven’t been disclosed.
Aboriginal consultation in a territory where a quarter of the population is Indigenous, meanwhile, needs travel, interpreters and repeat visits, and expediting it “does not produce prompt consent”, Aboriginal group the Northern Land Council said in a submission to an ongoing federal inquiry.
The NT Cattlemen’s Association expected DC development with “effective regulation, properly enforced, that safeguards pastoral operations and the land, water and environment both industries depend on”, said chief executive officer Romy Carey.
The territory government can override stakeholder objections but not when a complaint goes to the Federal or High Court, said Rolf Gerritsen, a former policy head for the Territory chief minister’s office who teaches at Charles Darwin University.
“If you’ve got increased opposition groups, whatever the development proposal is, it does tend to tie it up,” he said. — Reuters
