At a glance

  • Victoria's Sustainable Data Centre Action Plan, published on 22 September 2026, gives data centre investors one government contact and commits the state to publish maps showing where power, water and telecommunications capacity is available.
  • New data centres will offset their operating electricity with new renewable generation and storage, and cover their connection and network costs.
  • Planning schemes gain a land use definition for data centres, with a 150-metre buffer from homes and siting in rural zones only near transmission, substations or recycled water.
  • Cooling moves to recycled or non-drinking water, under a design limit of 1.6 on non-drinking water.
  • The new rules will not be retrospective for applications under assessment, the Premier's office said.

The Victorian Government published the full Sustainable Data Centre Action Plan on 22 September 2026, the day Premier Ben Carroll announced its headline rules. The plan, from the Department of Jobs, Skills, Industry and Regions, says Victoria operates more than 50 data centres, which delivered A$5.8 billion in capital expenditure last year.

The plan sets requirements under four headings: land use, energy, water, and jobs and local benefit. It pairs them with one government contact for investors and public maps of where power and water capacity is available.

Investors get one government contact and public capacity maps

Developers will deal with one government contact, called the Investment Front Door, which the plan describes as "the single entry point to government for major data centre investments". The government will also map Victoria's electricity, water and telecommunications capacity and publish the information, so developers can see where connections are available before choosing a site. The Investment Coordinator-General is the escalation point for projects of state significance.

Requirements will be published and reviewed as conditions evolve, so that they "keep pace with technology without shifting unpredictably under projects already underway".

New data centres bring their own renewables and pay for connection

Data centres will offset their actual operating electricity use by investing in new renewable generation and storage, and cover all connection costs and network augmentations required as a direct result of the investment. They will participate in demand flexibility services "to the maximum extent commercially and technically possible", and design to industry best-practice power usage effectiveness.

Detailed compliance, verification and firming requirements will be finalised in step with the Commonwealth's data centre standards, which the plan says are intended for legislation in early 2027. VicGrid, the state body that plans Victoria's transmission network, "will become a referral authority through the planning process".

The plan puts data centres at around 3% of National Electricity Market grid-supplied electricity, forecast to rise to around 6% by 2029-30.

Planning schemes gain a data centre definition

Planning schemes will define a data centre as "land used to collect, distribute, process, or store digital data". New data centres will keep a 150-metre buffer between a residential building and a data centre building, and are prohibited on residential and Green Wedge Zone land. In rural zones they can locate only where they are near, and can be serviced by, major transmission, substations, renewable energy facilities, battery storage or recycled water infrastructure.

WorkSafe Victoria, Fire Rescue Victoria, VicGrid and the relevant water corporation become referral authorities on all data centre applications. Detailed siting, design and built-form guidance will be developed with stakeholder input in 2027.

Cooling moves to recycled water under a 1.6 design limit

Data centres will meet cooling needs from recycled or other non-drinking sources, and pay the full cost of the water infrastructure needed to connect them. Facilities using water-intensive cooling will design to a water usage effectiveness of no more than 1.0 on drinking water or 1.6 on non-drinking water, unless otherwise agreed with the water corporation, with the limits reviewed annually. Where recycled supply is not yet available, the developer will agree a plan with the water corporation to offset interim drinking water use.

The plan's own figures show how little water operating data centres draw. Thirteen of the 15 data centres in Greater Western Water's area, which covers central and western Melbourne, used 33 megalitres between them "over the past year", about 2.5 megalitres per site. The plan puts data centres at "less than 1% of potable drinking water across the Melbourne and Geelong networks", and names the Melton Recycled Water Plant as the supplier to the Amazon Web Services data centre. AWS has signed with Greater Western Water to cool a western Melbourne data centre on recycled water from day one.

The plan also cites 19,714 megalitres a year sought by 19 data centre applications to the utility, which it puts at "roughly 4% of Melbourne's supply". That figure measures supply requested, not water used. On the same basis, the 33 megalitres used by operating data centres is about 0.007% of Melbourne's supply.

Noise and backup power stay under existing EPA rules

The Environment Protection Regulations 2021 already impose mandatory noise limits, and the EPA regulates backup generators through development and operating licences, the plan says. Statewide industrial and commercial limits include a night-time limit of 55 dB(A), or A-weighted decibels, "anywhere in Victoria". How each state sets its limits is covered in data centre noise in Australia.

Backup diesel generators will run for emergencies and mandatory testing, using best available technology such as generators equivalent to the US Environmental Protection Agency's Tier 4, its strictest standard for off-road diesel engines, with runtime and emissions monitored and reported.

The local investment guarantee covers jobs, training and suppliers

Developers will deliver a local investment guarantee with "proportionate, enduring and measurable local impact", covering local employment, skills development and training partnerships. The jobs requirements ask data centres to support training through apprenticeships and traineeships, TAFE and tertiary partnerships, and to prioritise Victorian content and local suppliers.

Industry welcomes the certainty and questions the buffer

"We welcome Victoria providing greater certainty around future data centre development," CDC Data Centres chief executive Greg Boorer said, SmartCompany reported. Belinda Dennett, chief executive of industry group Data Centres Australia, said the setback rules "were somewhat of a surprise" because they reduce the footprint that can be built on existing sites. "That potentially sends that investment elsewhere," she said.

Victoria's planning system "already restricts data centres to industrial zoned land, assesses actual impact and allows for conditions", Dennett said, AAP reported. AAP headlined its report a "fresh clamp down" on data centres, and The Age led on the exemption for applications already lodged.

Applications under assessment stay on the current rules

"The new rules won't be retrospective for applications under assessment," the Premier's office said on 22 September. That covers Galileo Group's A$1.1 billion data centre proposal on industrial land in Clyde North, lodged in April 2026 and still under assessment, the Cranbourne Star reported.

Eight Victorian data centres were under planning assessment, the AFR reported on 22 September.

What to watch

The capacity maps. The government has committed to publish electricity, water and telecommunications capacity information to guide where data centres locate.

The Commonwealth standards. Victoria's renewable offset rules will be finalised alongside the national standards intended for early 2027.