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Data centres for Tasmania?
Our secretive state government is “examining proposals” for a number of data centres (DCs) in the state. “Unnamed companies are looking at setting up up to 10 data centres in Tasmania” a document tabled by the state government in parliament reveals. Two of the confidential projects are in the feasibility stage, meaning a preferred site has been selected and the proponents are undergoing further assessments to determine overall feasibility. One of those is listed as needing 200-300 megawatts (MW) of energy, which could make it the biggest data centre in the state, depending what end of the range it sits at. Firmus Technologies is appealing against a council condition that limits the use of backup generators at its 288-megawatt AI data centre to be built at Bell Bay.
The company, which plans to have 276 diesel generators, has called the condition “unreasonable” in its restrictions.
Another listed project would also use 200-300 MW, though is still in the concept stage (https://www.abc.net.au/news/2026-09-09/six-new-confidential-data-centre-proposals-tasmania-revealed/107131974). The document states a 50 MW project in the concept stage had “expressed interest” in the recently shut down manganese smelter in northern Tasmania, Liberty Bell Bay. If the six confidential projects proceed, they would use at least 500 MW of power. The state government would not confirm if the six proposals were from one company. These proposals are in addition to Firmus Technologies’ three AI data centres in Tasmania – one under construction, another approved for construction in the ‘Bell Bay Advanced Manufacturing Zone’, and another waiting for approval at Wesley Vale in the state’s north-west.
Firmus is on track to become the state’s biggest power user, with its three facilities needing a combined 444 MW. Firmus confirmed it was not behind the six new proposals, but it has become the principal sponsor for our new AFL team. VIRIDIS is also setting up a small 1 MW data centre in Burnie, and has council approval. The state government has opened for comment its Draft Expectations for Data Centres and AI Infrastructure Developers. The expectations apply to large data centre developments which will generally include AI factories, hyper-scale data centres and multi-site developments by a proponent (https://engage.building.tas.gov.au/draft-expectations-data-centres-and-ai-infrastructure-developers)?
Potential respondents are invited to complete a survey or make a written submission within a set of seven parameters, all of which state pro-data centre expectations, not conditions, and in effect consist of advice to proponents. Closing date for responses to the survey and written submissions is October 12. Nowhere are the potential downsides of having a data centre in your neighbourhood addressed. Australia is experiencing a massive boom in data centre and AI infrastructure construction, with 162 operating facilities and 90 more planned with a market value forecast to reach US$7.25 billion in 2026 and grow to US$8.92 billion by 2031. If the AI investment bubble collapses, these will become stranded assets, with Tasmanian taxpayers, as usual, underwriting the clean-up.
The Australian push for DCs will be dominated by platforms like NEXTDC, AirTrunk, CDC (Canberra Data Centres), Equinix, and Macquarie Bank. Industry collaboration and advocacy is led by Data Centres Australia. They underpin a shift from standard cloud storage to AI factories requiring 100 to 500+ megawatts per facility. They will be concentrated heavily in major metropolitan areas like Sydney and Melbourne, with emerging regional expansion into places like Tasmania. Australia ranks globally as a top destination for data centre investment due to political stability and renewable energy potential. Data centres currently use about 2% of Australia’s grid, a figure projected to rise dramatically leading to higher utility prices and strict emission targets.
Intensive cooling systems place heavy demands on local water supplies. Surrounding suburban communities are increasingly pushing back over zoning, noise, including that from massive, continuously running cooling fans, disruption, and environmental footprints. Anthony Albanese wants new data centres kept away from homes, schools and prime farmland, but Queensland is pushing back against his renewable energy requirements. He was expected to detail further obligations for data centres in a speech to the Business Council of Australia annual dinner, ahead of a showdown with Queensland premier David Crisafulli at national cabinet on Wednesday. (Albanese caved in to his demands that data centres in Queensland be allowed to run on fossil fuel. The amount of extra emissions was not mentioned.) (https://www.smartcompany.com.au/technology/albanese-wants-data-centres-banned-near-homes-farms/). He will not introduce controlling legislation until next year, by which time many DC approvals may be issued unconditionally.
Data centres are set to overtake breweries as Sydney’s biggest water users. As well as requiring new centres to add more renewable energy to the grid than they take out and to minimise water use, they will also have to lessen community impacts by being appropriate for their size and avoiding sites that could be used for housing instead. That could put an end to proposals like one currently being planned in Macquarie Park in Sydney’s north, where developer NextDC is trying to build a data centre next door to a metro station.
Public opposition against AI data centres is growing rapidly due to concerns over high electricity bills, heavy water consumption, and localised environmental strain. They include the fact that massive electricity demands threaten to drive up utility rates for local residents and they require millions of gallons of water daily for cooling, straining local resources. Noise from cooling systems and backup generators, diesel fumes, and heavy truck traffic disrupt nearby neighbourhoods. Communities feel the bargain is unfair, as tech giants reap massive profits while offering very few permanent local jobs.
In Australia, resistance has emerged against major projects, such as startup Firmus facing local pushback in Tasmania over energy and water use, while groups, including the Australian Greens, call for a moratorium on new centres. In the United States a bipartisan backlash has turned data centres into a major political flashpoint and made them likely to be an issue in the looming mid-term elections for the House of Representatives and the Senate, with federal proposals like the Artificial Intelligence Data Center Moratorium Act aiming to restrict construction. In Tasmania, we can confidently expect that a pro-business government will be favourably inclined to the construction of data centres, and will over-ride any local government concerns.
John Fleming II

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