Cloud Carrier proposes gas-fired power station to power Moss Vale AI data centreBy Penny BurfittABC IllawarraTopic:AI2h ago2 hours agoWed 4 Mar 2026 at 3:59amThe first and smallest of three data centres planned for Cloud Carrier's Moss Vale site. (Supplied: Cloud Carrier)In short: Cloud Carrier plans to power its data centres with on-site gas-fired engines, producing enough energy to power 70,000 homes.Experts are concerned about the impact a mass rollout of data centres of a similar size would have on emission targets.What's next?A NSW upper house inquiry will probe the need for data centres onshore and their impact on the environment and communities.A small town in the NSW Southern Highlands is watching the AI revolution take shape in its backyard, as plans emerge to build one of the state's largest gas-fired power stations to run a data-processing complex.The proposal from Sydney company Cloud Carrier would see three data centres and a 700-megawatt (MW) power station built on a site six kilometres from Moss Vale.The power plant would be made up of 21 reciprocating engines, rather than the turbines used in traditional peaking power stations, generating enough energy to run 70,000 homesAs the state prepares for more and more data centres to come online in the AI age, the project provides an insight into their enormous energy requirements.Toby Walsh, an AI expert, says the project should be rolled out in a responsible way. (ABC News: Berge Breiland)Professor Toby Walsh is chief scientist at the University of NSW AI Institute."I don't think we fully appreciate the physical size of the infrastructure that's needed to give us AI services, to give us the digital services that we're increasingly using," he said."If we're not careful, this is going to be another major sink of electricity and also a use of valuable water.""We've got to roll this out in a responsible way."There are already 90 data-centre projects up and running in NSW and dozens more approved or in the planning pipeline."NSW is really keen to see the investment and the potential in terms of data centres," Environment Minister Penny Sharpe told Budget Estimates last week."You can't go anywhere without people talking about AI, talking about the importance of data centres."Gas for dataCloud Carrier has already constructed one small data centre on the site, and hopes to have the full "campus" up and running in five to eight years.Greg Jackson says gas-fired generation is the company's best option. (ABC Illawarra: Penny Burfitt)Its lead engineer, Greg Jackson, said the company was building essential infrastructure needed for the country's future."Potentially, you could support the data requirements of the federal government in this space," he said.He said the project would use no town water, thanks to a chip-cooling system that recycled water harvested on site on a loop.The data centre recycles the same water, supplied from its own harvesting on-site. (ABC News: Toby Hemmings)But he said the amount of power needed for the high-capacity chips used to store and process AI exceeded the grid's capability in the area."For reliability and economic reasons, pipeline natural gas is a suitable fuel," he said."That is transitioning to more renewable fuels and as they become available, we will transition our plant to use those fuels."Greg Jackson says Cloud Carrier plans to build 21 gas-fired generator halls to run their AI data centres. (ABC Illawarra: Penny Burfitt)Mr Jackson said the company would treat its emissions and reduce the plant's pollutants to well below the NSW Environment Protection Authority's limits for the area.He said the company wanted to be "a partner in the region," and was committed to employing from the local area.Energy anxietyDirector of the University of Wollongong's Energy Futures, Ty Christopher, said the prospect of data centres generating their own power on site was concerning."Going to a direct energy supply for these data centres — directly burning gas to generate their electricity — is going to slow down that journey toward net zero for Australia," he said."It's still a fossil fuel."Ty Christopher says he is concerned about data centres using gas to produce their own energy. (ABC Illawarra: Justin Huntsdale)A recent report from consulting firm Baringa predicted data centres would use 11 per cent of the country's energy by 2035 and could drive up emissions nationwide by 14 per cent in the same timeframe."We are going to need to substantially upgrade the grid and we're going to need to have much more generation come into the grid to supply these data centres," Mr Christopher said.Professor Walsh said state and federal governments would need to balance stringent planning frameworks with the need for data centres onshore."I definitely think we should be looking to build lots of data centres," he said."We don't necessarily want to put our sensitive data outside our sovereign borders — our sensitive medical, or security or commercial data. We want to be able to have control of that."Communities on the front lineA NSW upper house inquiry into data centres has been announced, with hearings to commence in May.Part of its remit is to investigate the impact data centres have on communities.The Cloud Carrier proposal is in the early stages in the State Significant Projects pipeline.An Environmental Impact Statement has not been prepared yet, but the buzz around Moss Vale is beginning to grow.Jessica Ryall, who lives about 2.5 kilometres from the Cloud Carrier site, said she was "shocked' when she saw the plans.Jessica Ryall says she is concerned about pollutants, emissions and vibrations. (ABC Illawarra: Penny Burfitt)"We're fine with the data centre, it's the gas plant attached to it that's the issue," she said.Community group Southern Highlands Matters is waiting for more information about the project to emerge, but has raised preliminary concerns about location, emissions and pollutants ."If it's approved here, then that sets up a precedent and it could be approved anywhere in NSW with a gas line," Ms Ryall said.A community member voices their opposition to the project with this sign. (ABC Illawarra: Penny Burfitt)The Wingecarribee Shire Council said it would wait for more details before making any submissions on the project.The inquiry will host its first hearings in May.