Recycled water pipeline to cool NEXTDC's S4 Sydney

At a glance

• NEXTDC's 365MW S4 Sydney campus at Horsley Park will be cooled with up to 16 million litres of recycled water a day from late 2027.

• Recycled water company coNEXA is funding the A$250 million extension itself and says it is believed to be the largest recycled water connection to a data centre in Australia.

• coNEXA chief executive Kurt Dahl says NEXTDC's commitment to S4 unlocked the scale to build the network.

• In 2026 NEXTDC designed its S7 and M4 campuses to run dry, where a recycled connection was unavailable or not commercially viable.

• NSW pricing regulator IPART approved the 15.7km pipeline on 30 September 2026, and construction starts in November.

NEXTDC will cool its S4 Sydney data centre with recycled water. Recycled water company coNEXA announced on 29 October 2026 that it will invest A$250 million to extend its AquaNet recycled water network, which supplies industrial customers in Western Sydney, to S4 at Horsley Park, techpartner.news reported. Water from coNEXA's Fairfield plant will run through a new pipeline from Smithfield, supplying up to 16 million litres a day. coNEXA said it is believed to be the largest recycled water connection to a data centre in Australia.

NEXTDC has designed two other 2026 campuses to run dry. Its 612MW S7 campus with OpenAI moved to a waterless design in July because the pipeline it needed had no planning approval, and on 27 October NEXTDC said its M4 campus in Melbourne would also use no water after a recycled connection proved not commercially viable. S4 has an approved, privately funded pipeline that coNEXA says NEXTDC's commitment made possible, giving the campus recycled water for cooling and keeping it off Sydney's drinking supply.

coNEXA says NEXTDC's S4 commitment unlocked the pipeline

coNEXA is funding the work with no government capital. "NEXTDC's commitment to S4 Sydney unlocks the scale and demand to build the first stage of a network that will serve more of Western Sydney industry and the community over time," coNEXA chief executive Kurt Dahl said.

In April 2026 NEXTDC reported a record 250MW increase in contracted utilisation at S4 and said it intends to invest approximately A$1.5 billion developing that capacity through to the end of FY27, its ASX release said. The pipeline will reuse up to 5.8 billion litres a year that would otherwise be discharged to the ocean, coNEXA said, with first water expected in late 2027, W.Media reported.

S4 is designed for a PUE of 1.125

S4, listed at 365MW of IT capacity on NEXTDC's site page and marked on the Sydney data centre map, is designed for a power usage effectiveness (PUE) of 1.125 at full IT load, which NEXTDC says is more than 25 per cent below the 2026 global average measured by data centre research firm Uptime Institute. NSW sets a PUE limit of 1.3 for new data centre applications, Reuters reported in July. NEXTDC said recycled water will support cooling designs that need less power, and chief engineering and design officer Jeff Van Zetten said cooling S4 with it puts the responsibility to use resources carefully "into operation". NSW Minister for Water Rose Jackson called the pipeline "exactly the type of project we envisioned when we released the NSW Data Centre Guidelines", which say recycled water should be prioritised for cooling.

How NEXTDC will cool S4, S7 and M4

Source: coNEXA, IPART, NEXTDC, Reuters and The Australian, July to October 2026.

S4 follows the approach NEXTDC set out when S7, a liquid-cooled AI data centre, moved to waterless cooling. "Recycled water ... has real merit and it can support lower PUE and better overall sustainability and NEXTDC considers it wherever that infrastructure exists," chief executive Craig Scroggie told Reuters in July. NEXTDC told The Australian it explored a recycled connection for M4 in Port Melbourne before choosing closed-loop air cooling.

IPART approved the pipeline on 30 September

The Independent Pricing and Regulatory Tribunal (IPART), which licenses private water utilities in NSW, approved the 15.7km pipeline from Smithfield, with three 10-megalitre reservoirs at Horsley Park, on 30 September 2026, subject to conditions. It received 15 submissions, mostly from residents near the reservoir site, according to IPART's determination report. Some further permits are still required before all works proceed, coNEXA says on its AquaNet expansion page.

Western Sydney is adding recycled supply

Sydney Water is also building recycled supply for data centres in Western Sydney. Its new Kemps Creek plant treats 35 megalitres of wastewater a day, and managing director Darren Cleary has said data centre customers will pay their own way, as reported when Sydney Water lined up recycled water for data centres. The expanded AquaNet network will also take new customers beyond S4, coNEXA says. The sites that could draw on both are in the directory of Australian data centres.

What to watch

The November start. Major construction is due to begin in November 2026, with civil contractors Killard, in collaboration with Ferrycarrig, and Vaughan Infrastructure.

First water. coNEXA expects to begin supplying S4 in late 2027.

The next connections. Further customers on the expanded AquaNet network, and Sydney Water's first data centre supply deal from Kemps Creek.