NSW hosts the largest data centre pipeline in the country and has just finished consulting on how to manage it. The five principles in the government’s consultation paper are sound. The hard question is the one South Australia is also facing, at a tenth of the scale: how do principles become consistent practice at the assessment table?
New South Wales is where Australia’s data centre build-out actually lives. At March 2026 the state’s development pipeline held 44 projects totalling 11.4 gigawatts and around 60 per cent of the 5.4 gigawatts in AEMO’s transmission connection queue. The Investment Delivery Authority has endorsed 15 Sydney-region projects worth A$51.9 billion for fast-tracked approval support. In March the government released a Data Centre Consultation Paper through Infrastructure NSW, setting out five principles for managing growth; consultation closed in May and a parliamentary inquiry is underway. The direction is being set now.
What the paper gets right
The principles have the right instincts. Developers should fund their own infrastructure requirements, over and above what is already planned, so households do not pay for the sector’s growth: that is additionality in all but name and it is the single most important discipline in this debate. Approvals should be evidence-based. The paper is also honest about a problem others gloss over: Sydney Water’s demand forecasts and industry-commissioned modelling diverge materially; the paper calls for shared data and standardised demand assumptions. You cannot plan a water or electricity network around numbers nobody agrees on.
The scale problem nobody else has
NSW’s challenge is not direction; it is volume. A connection queue several times larger than any plausible build-out makes planning hard for everyone. AEMO estimates that six of every seven megawatts in connection requests nationally may never materialise; NSW holds most of them. Phantom projects clog the queue, distort forecasts and can crowd out the real ones. At the same time the fast track raises the opposite risk: 15 endorsed projects moving through prioritised approvals will test whether speed and scrutiny can travel together. Prioritisation must never mean lighter conditions, or fast-tracking becomes under-conditioning at exactly the moment volumes peak.
The question every consent authority will ask
Principles change outcomes only when they reach the assessment table. Will a planner in Western Sydney, weighing a hyperscale application against housing and employment land, have the same tools and the same standard as an assessor in a regional REZ council? Will “evidence-based approvals” mean a published assessment standard, or a phrase in a paper? South Australia is confronting the same implementation questions with its dedicated Act; NSW faces them at ten times the scale and without bespoke legislation. That makes consistent, practical assessment machinery more important in NSW, not less.
The bottom line
The consultation was the easy part and NSW did it well. What follows determines whether the principles bite: a published assessment standard every consent authority applies the same way, honest shared demand numbers and enforceable local benefit through the planning agreement machinery the state already has. The states are converging on the same questions from different directions. Independent, cross-jurisdictional analysis of what actually works at the assessment table is becoming more valuable by the month; that is precisely where the Digital Infrastructure Institute focuses.
A topical commentary from the Digital Infrastructure Institute. For the underlying arguments, see our series on planning Australia’s digital infrastructure.