Australia has an opportunity that few countries can claim.
We have abundant renewable energy resources, a stable investment environment and the potential to become a regional leader in artificial intelligence and digital infrastructure.
Governments across the country are actively competing to attract new data centre investment, recognising the jobs, economic activity and strategic capability it can deliver.
But if the past decade of Australia’s energy transition has taught us anything, it’s that building nationally significant infrastructure is only half the challenge. Earning community support (or overcoming staunch community opposition) is the other half.
The parallels between renewable energy and data centres are becoming difficult to ignore.
Like wind farms, solar developments and transmission lines, new data centre developments are often being proposed within, or in close proximity to, established communities. While governments and investors see critical infrastructure, local residents often see something very different: another large industrial development consuming land, energy and water, changing neighbourhood character and creating unease about what comes next.
The concerns may differ in detail, but the dynamics are strikingly familiar.
Questions about electricity demand, water use, noise, traffic, diesel backup generators and visual impacts are becoming common features of planning debates. Add in social media, misinformation, political opportunism and growing scepticism about local benefits of large infrastructure projects generally, and the conditions for hostile community conflicts are set.
There are already multiple examples that show the risks.
In Melbourne’s West Footscray, residents have opposed the proposed expansion of NEXTDC’s M3 facility, raising concerns about noise, diesel generators, air quality and the proximity to homes of what would become one of Australia’s largest AI data centres. The proposal has also prompted criticism from the local council over planning processes and community consultation.
Similarly, on Sydney’s North Shore, AirTrunk’s continued expansion in Lane Cove has prompted increasing community scrutiny over cumulative impacts, including noise, diesel generators and compliance with local planning conditions. As additional facilities are proposed in the area, local residents and the council have argued that the combined impacts of multiple data centres deserve greater consideration than individual developments.
None of this suggests Australia should slow its ambitions. Quite the opposite.
AI, cloud computing and digital infrastructure will be essential to Australia’s future productivity, economic resilience and national competitiveness. But if these projects are to proceed at the pace governments hope, developers may need to think about community acceptance much earlier in the project lifecycle.
This is one of the key lessons from Australia’s renewable energy experience.
Too often, organisations have treated community opposition as a communications problem to be solved through better messaging or more consultation once concerns have already hardened. In reality, social licence is rarely about communications alone.
SenateSHJ’s Five Conditions for Social Licence framework was developed after years at the coalface, advising and supporting on addressing social licence challenges of Australia’s renewable energy transition. It recognises that community support is shaped by a combination of factors; whether a project aligns with a community’s aspirations, whether people trust the institutions involved, whether they feel respected and heard, whether impacts are managed fairly, and whether the benefits are recognised as genuine and shared.
Importantly, these conditions are interconnected. If one or more are weak, the remaining conditions are harder to meet.
Given how local data centre debates are shaping up, it’s clear the framework has relevance well beyond the energy sector.
Whether the project is a wind farm, a transmission line or a hyperscale data centre, the underlying need is the same: ensure communities understand not only what is being built and what the (real– not imagined) impacts will be, but why it belongs in their community, how decisions are being made, and what the benefits are for everyone involved.
Australia’s energy transition has been painful and hard fought, and the battle rages on around many of the critical infrastructure projects needed to achieve our net-zero ambitions.
The data centre boom is still in its early stages, which means the industry has something the renewable energy sector didn’t have; the benefit of hindsight.
If developers, governments and communities can learn from the past decade of Australia’s energy transition, there’s every chance the next generation of critical infrastructure can avoid repeating some of the same mistakes.
