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The large, empty block a few streets from Michael McKenzie Hocking’s house has been vacant for years. On Thursday, a small herd of cows grazed on its long grass.
The only public sign that a $1.1 billion data centre could soon be built here was recent graffiti reading: “Data centres are cooked”. But that got taken down almost immediately.
“I don’t remember ever seeing a formal sign put up there saying that a data centre was proposed,” says McKenzie Hocking – despite the fact the huge data centre will, if approved, entirely transform the quiet south-eastern Melbourne suburb of Clyde North.
Sydney developer the Galileo Group plans to build the 488-megawatt data centre – enough electricity to power two Geelongs, or four Ballarats. Finding out more from the local Casey Council, which is currently considering the plans, is not easy.
Plans were submitted to the council in April, but are not online and only available for inspection by visiting Casey’s Narre Warren offices. “But you can’t take your phone in,” McKenzie Hocking says.
The council, which confirmed this week the $1.1 billion proposal was under assessment, bans electronic devices to prevent photos being taken.
“State planning guidelines give council discretion in how information about applications is made publicly available,” a council spokeswoman says. “Providing hard copies for public inspection ensures universal access.”
Community opposition to the Clyde North plan is growing. This week, Greens MP Katherine Copsey tabled a petition in parliament signed by thousands of citizens calling for an immediate statewide moratorium on large-scale data centres, specifically citing the Galileo proposal.
The friction in Clyde North is a microcosm of a broader collision occurring over data centres across Melbourne’s outer growth corridors.
To understand why tech giants and private equity funds are racing to buy up outer-suburban paddocks at such a frantic rate – Galileo and its director, Victoria Racing Club board member Neil Werrett, paid $130 million for the Clyde North site last year – you have to look at the changing physics of the internet.
Traditional cloud storage used for email, streaming TV, or photos required standard server racks with modest energy draws. The explosive adoption of artificial intelligence apps like ChatGPT, Claude and Gemini require specialised, high-density chip arrays that consume up to 10 times the power per rack.
And all that processing power demands two things: direct access to metropolitan fibre-optic cable to eliminate lag, and proximity to high-voltage transmission lines and electrical substations. Pockets of Melbourne’s outer growth corridors like Clyde North have suddenly become some of the most sought-after real estate in the Asia-Pacific – because they sit right on top of these power corridors.
Data centres represent an industrial scale that existing planning rules were never designed to handle, insulating billion-dollar-plus projects like Clyde North from resident objections and VCAT review.
After localised community outcries from around outer Melbourne for several months, the issue reached a head in Victorian politics this week. The Carroll government released its long-awaited Sustainable Data Centre Action Plan, which promised 150-metre residential buffer zones and mandatory community notification for future projects. The new rules, though, won’t apply retrospectively.
That carve-out leaves Clyde North and a string of other controversial projects – including sites in Campbellfield and in Plumpton in Melbourne’s outer north-west – unaffected. Instead, they remain governed by old rules that treat energy-intensive digital factories little differently, critics argue, to standard storage warehouses.
The timeline at Clyde North is instructive in how the planning gaps on paper play out in practice.
In February, Planning Minister Sonya Kilkenny approved a precinct plan for the site designed to create a more traditional commercial hub supporting 6800 local jobs.
Ten weeks later, Galileo Group – which did not respond to requests for comment – lodged its planning application to build a server campus across that employment land. Because the site sits in an Urban Growth Zone with an approved precinct plan, state rules automatically exempt the proposal from public notice and VCAT appeal rights.
These state-sanctioned exemptions have drawn fury from crossbench MPs, including Legalise Cannabis upper house member David Ettershank. He has campaigned against data centre expansions in Melbourne’s west, and labelled the government’s action plan a “pitiful pre-election farce” that leaves residents facing massive developments on their doorsteps without even immediate notice.
“We’ve been asking about community consultation, electricity costs, fire safety and the impact on people living next to these enormous facilities,” Ettershank says. “The government has finally acknowledged the problems but still can’t tell us when the new protections will apply. Why are we still approving developments before the controls are in place?”
On Wednesday, that collision between the state government, big tech, and suburban realities moved into a community hall in Yarraville, where a Senate inquiry heard from resident groups and proponents.
Residents living beside NextDC’s sprawling West Footscray data centre – a site currently expanding, with a further expansion application sitting on Kilkenny’s desk – described a daily reality of continuous low-frequency noise, exhaust fumes from regular diesel generator testing, crane lighting flooding bedrooms at night, and persistent street trenching.
Jacqui Glover’s property boundary sits 15 metres from the NextDC site. She told the Senate hearing that while she welcomed the state’s proposed 150-metre buffer for future developments, it offered no relief to established communities. “It’s too little, too late for us,” Glover says.
Committee chair and Greens senator Sarah Hanson-Young questioned what local communities received in return for hosting massive infrastructure. “Right now, the only ones benefiting are the big, trillion-dollar AI companies,” Hanson-Young told the hearing.
The testimony exposed a widening gap between industry ambitions and local tolerance.
Phil Galloway, managing director of renewable energy firm Syncline Energy, described for the committee his firm’s proposed 350-hectare AI hub in Plumpton that would feature Australia’s largest data centre.
“It is big,” Galloway told the hearing.
The facility would require 2.4 gigawatts of power – more than the combined total capacity of every operating data centre in Australia. Galloway said it was crucial that companies like his communicated well with local communities over projects. “It needs to have social license.”
Galloway argues much local anxiety stems from seeing what has unfolded in the United States, where lax planning laws have led to residents being severely affected. That won’t happen here, he says, because Australian regulatory scrutiny is far stronger.
Samantha Demjancuk has lived for three decades in Diggers Rest, five kilometres from the Plumpton proposal. She fears the facility will mark the start of a broader industrial expansion across her region.
“The scale of this data centre is absolutely monolithic,” Demjancuk says. While awareness of data centres is growing, she believes few residents grasp their physical footprint. “So we’ve just been generating awareness – there are a lot of questions, and we don’t have a lot of answers.”
While state leaders routinely welcome data centre investment as economic wins, industry data shows the permanent job yield from hyperscale facilities is minimal once construction crews depart. State planners spend years designing “employment precincts” intended to support thousands of diverse local jobs in manufacturing, retail, and office spaces – only to have many hectares of that land taken by a single digital warehouse likely with much lower staffing.
A data centre is proposed 300 metres from Anastasia Drapaniotis’ Campbellfield home, where she has lived since she was 11. The facility is planned for the former Ford manufacturing site, next to Upfield railway station.
When the plant was operating, Drapaniotis remembers local shops bustling with “an abundance of people coming and going all the time.” At its peak in the 1980s the Ford plant employed 5200 workers.
The data centre planned for the same land will need 49 employees in its initial stage, growing to 255 on-site staff when all stages are completed over 12 years.
The sector’s growth carries broader resource implications. Data centres draw around 3 per cent of the nation’s electricity grid, the Australian Energy Market Operator says. That will rise to 12 per cent in a decade, the Victorian government’s data centre plan noted this week.
Water consumption, an emotive topic for opponents of data centres, is far less clear-cut. Industry group Data Centres Australia points to research it commissioned showing facilities use 0.04 per cent of drinking water nationally – seven times less than the nation’s public swimming pools.
Data Centres Australia chief executive Belinda Dennett criticises the proposed 150-metre buffer, arguing operators already comply with strict noise and environmental controls.
“It is disappointing to see Victoria, the state that recognised the economic opportunity to attract data centre investment and proudly declared its ambition to be a global data centre leader, now move to impose requirements on data centres that apply to no comparable industrial use,” Dennett says.
Back in Melbourne’s south-east, under mounting pressure from locals, Casey Council voted last month to “call in” the Galileo Group application – meaning the proposal will at least now be discussed by councillors in a public meeting, rather than simply ticked off by council planning officers under delegated authority.
Yet calling in the permit does not mandate public advertising of the project, or give locals any role in deciding on the plan.
For McKenzie Hocking and neighbours in Clyde North, the basic question of how a $1.1 billion project can progress behind closed doors remains unanswered. McKenzie Hocking says the growing concern over suburban data centres stems directly from fears over artificial intelligence. Data centres are the most visible manifestation of that shift – and one of the few physical objects residents feel they can try to influence.
“The fight over data centres has become a lightning rod for community anger, economic distress and a lack of positive vision of their future and their families.”
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