Data centres create a people power surge the industry didn’t see coming

Editorial

October 27, 2026 — 5:37pm

The growth in data centres has become a case study in power: corporate, government and the will of people. The rise of artificial intelligence and the data centres that deliver it have been spectacular, both in financial terms and in its potential to fundamentally change life on this planet.

In this new world order, a centuries-old law of science should also be invoked – Newton’s Third Law of Motion: for every action there is an equal and opposite reaction. This has been clearly demonstrated recently – two companies NextDC and Firmus have been battered in two very different ways.

Firmus’s investors throttled back their enthusiasm for the company’s aspirations, prompting the withdrawal of its plans for a multibillion-dollar listing on the ASX. It was a local symptom of a very global scepticism around the boomtime spruiking of AI companies.

NextDC was upended not by traders, not initially anyway, but by people whose lives would be directly affected, and were being affected, by data centre development.

For NextDC, suburban resistance transformed ripples of rebellion on Melbourne nature strips against new power poles into a watershed market moment. A collapse in its share price wiped $3 billion off the company’s valuation, almost halving its market value.

This, in turn, prompted the stalling of its data centre expansion on 10 hectares at West Footscray. That centre was already a focal point for those who felt the industry was riding roughshod into neighbourhoods. Two results of all this have been a shake-up of the board with chairman Douglas Flynn to stand for re-election at its annual meeting with investors next month but then retire once a replacement is found, and chief executive Craig Scroggie to forfeit millions in bonuses.

The power needed for West Footscray meant energy infrastructure company Jemena had to replace standard wooden electricity poles with 15-metre-high concrete ones carrying 66,000 volts in West Footscray and Yarraville. Enter suburban resistance. Jemena has halted putting the power poles up until at least February and NextDC is now looking at alternative routes or even burying the cables. These delays mean dollars.

The NextDC data centre sits on five hectares, and was planning to double its footprint, having applied to Planning Minister Sonya Kilkenny under the government’s fast-track Development Facilitation Program. A decision has now been delayed until after next month’s election.

As premier, Jacinta Allan welcomed data centres to Victoria with open arms. The state wanted to attract “as many as we possibly can” and offered a fast-track approach.

With little requirement to deal with local communities, companies like NextDC have clearly not done the work necessary to bring those communities with them, failing to extend even basic courtesies to explain what’s happening in their streets.

The industry now has too few supporters because it hasn’t cultivated them as it enthusiastically embraced the government’s consultation carveouts.

That meant there is little community buy-in, from the inner city, to large projects such as NextDC’s proposal for Geelong or Syncline’s 350-hectare, 2.4-gigawatt development in Plumpton, in Melbourne’s outer north-west.

The industry was thus caught very short when the wind changed. A month ago, Premier Ben Carroll announced measures to put a stricter regulatory framework around data centres’ growth in an attempt to lessen the impact on communities.

The centres will be banned from residential areas, a 150-metre buffer zone between a centre and homes will be put into place, and they will need to supply their own electricity and use non-drinking water.

Opposition Leader Jess Wilson has yet to announce her party’s views. Many residents, we would proffer to say, would like to know.

The shadow attorney-general James Newbury last month noted that residents were “deeply concerned” at data centres being approved in inappropriate areas.

“We back communities having their say, keeping their character. No wonder the community is upset about it. Community should be at the centre of decisions.” Perhaps residents also should be concerned that the opposition has not given them a policy on the matter.

This pushback has resulted in data centre projects being shelved from Western Australia to NSW and to US states such as Wyoming, where one centre was going to cover almost 500 hectares.

A Resolve poll in The Age this week found 32 per cent of respondents supported data centres in Australia, 33 per cent were opposed and 35 per cent were unsure.

However this division into thirds is interpreted, one conclusion cannot be denied.

When a people’s amenity will be affected by a development then they must have a say in what is being proposed. We said this a month ago, we say it again now.

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