AdvertisementResidents and community groups are celebrating after an industrial property giant abandoned plans to build a hyperscale data centre on Sydney’s north shore, as the local mayor called for a moratorium on similar developments until tougher laws are introduced.Goodman Group had placed state-significant plans for the construction and 24/7 operation of an $800 million, 81-megawatt data centre on public exhibition in March, which would have required the demolition and excavation of four existing warehouses. The case sparked outrage among residents, attracted widespread media coverage, and became a flashpoint for the spread of artificial intelligence infrastructure across the country.Lane Cove residents have pushed back against data centre developments for months, and welcomed Goodman’s backflip.James BrickwoodProject Mars is the third data centre proposal withdrawn in Australia in five months, after similar community campaigns sank projects in Perth and Katoomba.In a letter to the NSW government on Monday, Goodman’s head of planning, Guy Smith, confirmed it was withdrawing the application and cited “emerging federal and state policy” as among the reasons for abandoning the development.Advertisement“During this time, the policy and regulatory environment for large-scale data centre development has evolved significantly,” it said.“Goodman has carefully considered these changes together with feedback received through the planning process, including the views of the local community.”A concept view of the data centre’s facade from Mars Road, Lane Cove.UrbisData centres are large, energy-intensive facilities requiring uninterrupted power and a constant supply of potable water to cool servers. At capacity, Goodman had anticipated Project Mars would have used about 35 litres of water per second during peak times and about 1.4 million litres per day.AdvertisementGoodman Group was also asked about the proposal at a Senate inquiry into data centres and artificial intelligence last week, but the appearance of senior leaders via audiovisual link was plagued by technical problems. At the time, Liberal senator Sarah Henderson said Goodman’s proposal was “wholly unreasonable, and frankly a grossly irresponsible proposal which shows contempt for local residents”.The 28-metre-tall “Project Mars” data centre would have been located within the Lane Cove West industrial area, which is bordered by a park, low-density homes 50 metres to the east, and Lane Cove West Public School about 160 metres north-east of the site.Liberal senator Sarah Henderson said Goodman’s proposal was “wholly unreasonable, and frankly a grossly irresponsible proposal which shows contempt for local residents”.James BrickwoodLane Cove Mayor Merri Southwood welcomed the withdrawal and has called for a moratorium on the construction of all future data centres in the local government area until NSW planning laws are in place to protect residents.“We need data centres, but this one was totally in the wrong location – it was right next to a house, very close to schools and would have come at a huge cost for the community,” she said.Advertisement“We need a moratorium until planning legislation and protections including noise, power, water and emission standards are in place, because at the moment, data centres are popping up like mushrooms before the regulations are in place.”Lane Cove Responsible Planning spokesperson Sasha Titchkosky said she was in disbelief and felt “ecstatic” after hearing plans were withdrawn.“[The community] is just overjoyed. It’s a mixture of happiness and relief. It’s been really energising to see we can actually make a difference if they band together and really work together to achieve an outcome.”Titchkosky hoped Goodman’s backflip would set a precedent for the industry to “properly consider what they’re expecting people to live with”.Advertisement“It shouldn’t really take us to raise the issues that should be built into regulations,” she said.The proposal also attracted concern from utility providers Sydney Water and Ausgrid, which said the development would strain existing infrastructure and increase electrocution or fire risks.In a letter to the planning department in May, Ausgrid raised issues about the compatibility of the data centre with existing infrastructure, requiring “due consideration be given … particularly in relation to risks of electrocution, fire risks”, citing other noise and visual amenity impacts.There is another major data centre planned for Lane Cove – AirTrunk is seeking approval to build “Mars Road”, a 37-metre-tall, 140-megawatt data centre between Apollo Place and Mars Road.AdvertisementSydney Water said in a submission it was “unable to support progression” of the data centre without more detailed planning assessments of water demand and wastewater impacts. The state-owned corporation said Project Mars would have heaped pressure on the existing drinking water system.Both utility providers’ doubts illustrate a pattern of concerns that emerge when data centre developments outpace upgrades to critical infrastructure, strained by population growth and climate change. The global AI boom has boosted demand for data centres: there are 49 state-significant projects across Sydney in the pipeline.Lane Cove MP Anthony Roberts said Goodman’s withdrawal was a “commonsense win” for the community and sent the message to other developers to find suitable locations before submitting proposals. “Data centres have an important role to play, but developments of this size and scale need to be appropriately located and planned with the surrounding community in mind.”Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.SaveYou have reached your maximum number of saved items.Remove items from your saved list to add more.ShareLicense this articleMore:Data centresCity lifeDevelopmentSydneyFor subscribersLane CoveGoodman GroupNew South WalesAIWaterCindy Yin is an urban affairs reporter at The Sydney Morning Herald.Connect via email.Jessica McSweeney is a reporter at The Sydney Morning Herald covering state politics and urban affairs.Connect via email.David Barwell is an urban affairs reporter for The Sydney Morning Herald.Connect via email.AdvertisementAdvertisement