Thirsty data centres threaten to delay thousands of new homes

Thirsty data centres are threatening to delay the construction of thousands of new homes in northern Sydney because of a lack of water to supply residential properties.

City of Ryde chief executive Wayne Rylands said there was a mismatch between the state government’s housing targets and its policy to allow data centres in Macquarie Park due to the area’s strained water supply, which is not due to be addressed for another two years.

Constraints on water supply to Macquarie Park threaten to delay the building of thousands of new homes.Credit: Dion Georgopoulos

Data centres are buildings dedicated to storing IT infrastructure. They use hundreds of thousands of litres of water a day to keep cool, and this increases significantly during periods of hot weather.

Macquarie Park houses a number of data centres, with more in the planning pipeline. It is also earmarked for thousands of new homes close to metro stations under the state government’s transport-oriented housing reforms.

Rylands said data centres should be located in places with adequate power and water supply, accusing the state government of “inadvertently killing off” high-quality employment opportunities by allowing build-to-rent projects and data centres to “muscle out” existing business.

“There is also a lack of consideration given to the time lag between infrastructure and dwelling delivery,” he said.

Macquarie Park is home to a number of data centres, which use significant amounts of water a day to keep cool.Credit: Janie Barrett

A Planning Department spokeswoman said a proposed rezoning reduces the land available for data centres in the heart of the precinct and “provides flexibility for residential development on key sites”.

However, Ryde Council wants to preserve land in Macquarie Park for commercial and employment uses, claiming there are more than 20,000 apartments planned for the precinct.

Rylands said the council was opposed to the growing presence of data centres “in a district that we are trying to orient towards people – housing and jobs”.

A Sydney Water spokeswoman said an upgrade of water supply to Macquarie Park was due for completion in 2026.

The agency was working with the council to provide developers with the “necessary servicing advice” if connecting before 2026 due to “some capacity constraints”, she said.

“Sydney Water is in discussions with major data centre providers to understand their expansion plans and water demands and to inform servicing pathways for the future,” she said.

Local data centre operators Next DC and Macquarie Telecom declined to comment.

Australian data centres are estimated to consume 47 billion litres of water a year.

They are also power hungry, consuming an estimated 5 per cent of all electricity in Australia.

Property developers are also worried about Macquarie Park’s water supply.

Urban Development Institute of Australia NSW chief executive Stuart Ayres said plans for a mixed-use innovation precinct in the suburb were at risk if government agencies did not keep pace with providing critical infrastructure upgrades.

The concerns come as Ryde Council warns increasing the number of people living in Macquarie Park risks driving out companies.

Fujitsu, Siemens, Polestar and Volvo have also abandoned or are scaling back their presence at Macquarie Park, Rylands said. “These businesses are becoming increasingly concerned with the encroachment of residential development that is non-compatible with innovation.”

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