Dover's 200MW South Morang data centre awaits a federal ruling

At a glance

• Dover DC's second South Morang data centre, SM1B at 165 Williamsons Road, now waits on a federal environment decision after public comment closed on 29 October 2026.

• Dover says SM1B will run up to 200MW and cost more than A$2.6 billion to build at first, on a site beside AusNet's South Morang Terminal Station.

• A four-way joint venture owns the project, and ASX-listed CVC Limited holds 30 per cent of it.

• CVC told shareholders that the South Morang project "has generated strong interest from data centre buyers across both Stage 1 and 2".

• Victoria's planning minister will decide the state permit, and the City of Whittlesea has asked the state to put that decision on hold.

A delegate of the federal environment minister is deciding whether Dover DC's SM1B data centre at 165 Williamsons Road, South Morang, needs further assessment under national environment law. Public comment on the referral closed on 29 October 2026. The National Environmental Protection Agency's portal now lists the project as "Awaiting Delegate Decision". The developer, DOVER1 SM2 Pty Ltd, referred it under the Environment Protection and Biodiversity Conservation (EPBC) Act, the federal law that protects matters of national environmental significance, including threatened species and ecological communities.

If built at the full 200MW Dover gives for it, SM1B would equal about an eighth of the roughly 1.5GW of data centre capacity CBRE counts running across Australia. The two figures come from different sources and are not measured on the same basis. Dover puts the initial capital investment in SM1B at more than A$2.6 billion on its project questions page. Its indicative timeline for the two-site project has construction starting in late 2026 or early 2027 and the first operations in late 2028 or early 2029, subject to approvals. The federal referral gives a later window, from July 2027 to July 2029.

South Morang is in Melbourne's north-east, away from the city's established data centre cluster through Derrimut and Truganina. Three of the four campuses that entered Victoria's planning system between April and July also sit outside that cluster. A South Morang application was already on the state's ministerial permits register when we covered HyperDC's Moorabool campus in September.

SM1B sits beside AusNet's South Morang Terminal Station

The 8.6-hectare site is bounded to the west by the South Morang substation and terminal station, according to the referral. A terminal station is a major substation on the high-voltage transmission network. It steps power down for the networks below it.

Two underground 220 kilovolt cables will run from the terminal station to the site, so the project connects at transmission level rather than through the local network that supplies homes. AusNet operates the terminal station. It will design, build and run the connection works, and the project will repay it over 20 years, according to Dover. Dover is still completing the modelling studies for the connection application.

A test-fit plan shows a 192MW IT load

The referral includes an architect's ground floor plan marked "test fit only". It shows a 192MW IT load across three floors of 64MW each. IT load is the power drawn by the servers and network equipment, before cooling and the rest of the building. The same plan allows for 35 backup generator sets of 3MVA on each of three levels. A July 2025 noise assessment in the referral allows for 25 chiller blocks of 10MW on the roof.

Dover's early design target is a power usage effectiveness (PUE) of 1.2. PUE divides a data centre's total power use by the power its IT equipment draws. A figure of 1.0 would mean no overhead. The design uses water-cooled chillers and cooling towers, with a target of less than one litre of water for every kilowatt-hour of electricity. Yarra Valley Water helped shape the water plan.

Victoria's Sustainable Data Centre Action Plan will require new data centres to cool with recycled or non-drinking water and to supply their own renewable energy. Dover is in advanced discussions with an Australian clean energy company about long-term power purchase agreements for the project, its questions page says.

CVC Limited holds 30 per cent of the project

Four joint venturers own the project through DOVER1 SM2, which holds the assets for them under an agreement dated 28 October 2025, the referral shows. Three private trusts hold 23.33 per cent each through company trustees. The remaining 30 per cent belongs to ASX-listed CVC Limited, a property finance and development investor.

CVC released its annual report to the ASX on 9 October. It reports that a planning permit application for Stage 2 was lodged during the 2026 financial year, with a decision expected in the 2027 financial year. "This progress across the project has generated strong interest from data centre buyers across both Stage 1 and 2," CVC wrote.

We expect SM1B to be sold to a data centre operator before it is built, because CVC is a developer and financier that reports buyer interest and describes "a range of monetisation strategies" for its major projects. A site planned to connect straight to the transmission network suits a buyer that wants large power, if the connection is approved. Victoria's plan also makes new data centres pay for their own grid upgrades.

Source: Dover DC; CVC Limited results presentation (26 August 2025); EPBC referral 2026/10668; Victorian planning permit PA2402997. Capacity figures are as each source states them and are not all measured on the same basis.

Neither site is in the directory of Australian data centres or on the Melbourne data centre map yet.

Dover cut the design to one building to protect woodland

Dover reduced the plan from two data centre buildings to one. That cut the footprint from about 34 per cent of the property to about 10.5 per cent, according to the referral. The developer told the regulator it considers the project a controlled action. That is one the environment minister decides is likely to have a significant impact on a protected matter, and must assess further before deciding whether to approve it.

After avoidance and mitigation, "there will still be significant residual impacts" on a critically endangered grassy eucalypt woodland community and the threatened Matted Flax-lily, the referral states. It proposes clearing 2.79 hectares of the woodland and nine of the 14 Matted Flax-lily plants on the site. Another 1.72 hectares of woodland is kept.

The proposed offset is about 18 hectares of a property at Moyston, near Ararat, more than six times the impact area. At a meeting before the referral, the federal environment department advised that an ecological assessment and a closer look at the bioregion boundary would be needed.

Victoria's planning minister decides the state permit

SM1B is being assessed under Victoria's Development Facilitation Program (DFP), the state pathway under which the planning minister decides an application directly. Dover lists the application as PA2604586, with public notice open until 10 November. SM1A won its permit under the same program in September 2024. State rules for data centres are compared in Australian data centre policy by state.

The City of Whittlesea called on 23 October for "an immediate hold on the determination of further data centre applications in the City of Whittlesea, including the current application for a proposed data centre at 165 Williamsons Road, South Morang", in a statement on its website. The council wants a moratorium on data centre approvals until the state's proposed planning reforms for data centres are finalised and written into planning schemes. Mayor Lawrie Cox said "there is a place for data centres, but the key question is how and where they are located".

What to watch

The federal decision. The environment minister's delegate decides whether SM1B is a controlled action, which would mean further assessment before an approval decision under the EPBC Act.

State public notice. Submissions on PA2604586 close on 10 November, according to Dover, before the planning minister decides.

A buyer. CVC expects the Stage 2 permit to be determined in the 2027 financial year, which ends on 30 June 2027.

Source: EPBC referral 2026/10668 and its attachments (September 2026); Dover DC; CVC Limited annual report (9 October 2026); City of Whittlesea (23 October 2026); Victorian planning permit PA2402997.