Victoria wants to be Australia’s AI capital and its Sustainable Data Centre Action Plan is the most coordinated state response yet. With South Australia legislating and NSW consulting, the country now has three distinct models for managing the data centre boom. They are converging on the same unanswered question: what happens at the assessment table?
Victoria’s Sustainable Data Centre Action Plan (February 2026) is a genuinely different animal from what the other states have done. It is a whole-of-government framework led by the industry portfolio with energy, planning and government services alongside, built through engagement with operators, utilities, transmission companies and planning agencies. It covers five areas: giving investors clear information on land, energy, water and transport; integrating facilities into the energy system sustainably; managing water demand system-wide; building the workforce through TAFE and tertiary partnerships; and coordinating planning. The government puts the potential pipeline at more than A$25 billion and the state has demonstrated the fastest major data centre approval in the country. The ambition is explicit: Australia’s AI capital.
Three models in the space of five months
Australia’s three biggest data centre states have now shown their hands and no two answers match. South Australia chose legislation: a strategy built on “new energy for new demand”, with a dedicated Act to give its requirements statutory force. New South Wales chose consultation: five principles through Infrastructure NSW, now being converted into policy while a parliamentary inquiry runs alongside. Victoria chose coordination: a non-statutory action plan that gets agencies, utilities and investors working from the same page without new law. Each model fits its state. SA is protecting the world’s most advanced renewable grid and can afford to set firm terms. NSW is managing the largest and messiest pipeline and needed to hear from everyone first. Victoria is competing for investment and optimised for speed and certainty.
What Victoria gets right
Coordination is the thing most jurisdictions never achieve and Victoria has built it deliberately: the energy system, water system, land supply and workforce pipeline treated as one problem rather than four portfolios. The plan’s instinct on water, a system-wide approach to demand rather than project-by-project improvisation, is exactly right for a state whose supply is drought-sensitive. The workforce partnerships acknowledge what our research keeps finding: the constraint on this industry is increasingly people, not power. Speed, done properly, is also a virtue; a 75-day approval with a strong evidence base beats a two-year approval with a weak one.
What’s still missing, everywhere
Here is the convergence: an Act, a consultation and an action plan all still need the same missing layer. When a hyperscale application lands in front of a council planner or a state assessor, what standard applies? Which metrics? What counts as genuine additionality, real water stewardship, enforceable community benefit? None of the three models yet gives its assessors a published, consistent, project-level standard. Victoria’s version of the risk is sharpest because its approvals are fastest: speed without a published standard will eventually be read as light scrutiny, fairly or not. A 9 gigawatt pipeline that industry expects to deliver less than a gigawatt by 2030 also means Victorian assessors will spend much of their time on projects that never get built, which makes consistent, efficient assessment machinery more valuable, not less.
The bottom line
Three states, three models and the differences are instructive; the gap is identical. Principles, plans and even statutes change outcomes only when they reach the assessment table as practical tools. That layer, consistent assessment standards, honest demand numbers and enforceable benefit, is jurisdiction-neutral by nature and it is exactly what the Digital Infrastructure Institute builds. We will be watching how each model performs and comparing notes across all three, because the state that closes the gap first will set the national norm.
A topical commentary from the Digital Infrastructure Institute. For the underlying arguments, see our series on planning Australia’s digital infrastructure.