Data centres and developers

If you're planning to build a data centre, we need to assess its water needs as early as possible. We'll help you review options and support NSW planning requirements.

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Collaboration means faster approvals

What you need to do

Collaboration means faster approvals

With AI and cloud computing on the rise, more data centres are being planned across Sydney. They also generate significant heat and may require large volumes of water to stay cool.

To support this growth while protecting water security, we need to:

  • enable access to resilient, reliable and rainfall‑independent water sources
  • ensure servicing capacity for homes, businesses and essential services
  • future‑proof our water infrastructure.

We will work closely with developers to ensure that data centres and data centre clusters are located in areas with sufficient water and wastewater services. We're also collaborating with government and other stakeholders to understand and finalise planning and funding options.

Early consultation is essential

We want to work with you, so you must consult early with both Sydney Water and the NSW Department of Planning, Housing and Infrastructure (DPHI). This will ensure alignment with planning and approval processes.

Need more information?
Email us at datacentres@​sydneywater.​com.au to discuss possible data centre locations or next steps.

Our customers have told us they want a water network that is resilient. Some data centres require large amounts of water, adding pressure to water supplies dependent on rainfall. Meeting the demand through the drinking water network is not sustainable. Using highly treated recycled water from existing treatment facilities or sewer mining provides a sustainable alternative source and reduces demand on the drinking water system.

  • Recycled water options include a dedicated supply network for data centres to enhance reliability and simplify management. Purpose-built infrastructure ensures the water system meets the specific needs of data centres without affecting drinking water services for customers.​
  • Sewer mining involves extracting and treating wastewater directly from the system. It offers an alternative water supply, which helps reduce pressure on our broader network.
  • We may be able to provide a dedicated recycled water network. This will simplify management for the data centre. This will ensure the water demands for cooling of data centres are met without being affected by fluctuations in the drinking water system.

Data centres need to be able to change water sources for cooling in the future. Using separate pipes for data centres helps keep our water network resilient and allows for future use of recycled water.

  • We encourage the use of separate pipes (dual reticulation)
    Data centres must have 3 separate pipe systems installed. The first supplies water for drinking and bathrooms. The second supplies recycled water for cooling. The third supplies water for firefighting.
  • Easy conversion
    Having separate pipes makes it easier and cheaper to switch from drinking water to recycled water in the future. Without a dual set-up, the data centre may face operational hurdles as local water regulations evolve.

As different locations have different water availability, consulting with us early is the most effective way to avoid project delays. See what you need to do.

  • Understand water availability before purchasing land
    Speaking with us before you select land can help ensure you're building in an area with water capacity. Some areas may not have enough water supply to support a data centre immediately. We can advise on the water capacity of a specific area through the feasibility application process.
  • Interim solutions
    If the data centre will be built before recycled water pipes reach the site, we may allow you to use drinking water temporarily. However, you need to engage with us early so we can model drinking water availability and timing. Please plan well in advance.

Our wastewater systems are already nearing capacity. With significant growth in Western Sydney, clusters of large data centres will require tailored wastewater solutions to minimise the impact on our wastewater systems.

  • Challenges for water resource recovery facilities (WRRFs)
    We currently estimate that around 10% of the water used for cooling will be discharged to our wastewater system. This concentrated wastewater will likely have a salinity content above the acceptable limit, particularly for inland WRRFs.
  • Unique solutions required
    Individual and clusters of large data centres in Sydney's west will need unique wastewater solutions.

What you need to do

The steps below are indicative only. They may change as a result of policy change and the volume of data centre initiatives.

Step 1: Register your potential development via the feasibility process

You can lodge a formal feasibility application through a water servicing coordinator.

  • An application fee applies.
  • You will need to provide detailed servicing information.
  • You will receive a feasibility letter outlining our current servicing position, options and next steps.

Once your formal application is lodged, you'll have a dedicated account manager to guide you through the next steps.

Feasibility applications allow us to:

  • plan for future demand
  • identify where accelerated planning or infrastructure investment is required
  • ensure commercial servicing strategies align with population growth across the network.

Your formal feasibility application must contain:

  • a site plan of the proposed development
  • development staging timelines
  • yearly average day demand (ADD) flow profile, and yearly maximum day demand (MDD) flow profile – specifically, the first 10 years
  • maximum hour demand (so we understand the impact on our network during peak hours)
  • high demand days (such as 95th percentile, or those high demand 5–10 days per year)
  • wastewater discharge volumes, and quality of discharge (including any additives to the make-up water)
  • on-site storage (potentially up to 2 days capacity) for each stage of the development and/or efficiency measures you've considered
  • number of jobs anticipated and staged uplift per annum, where applicable
  • differentiated requirements for drinking water (such as jobs or office use) vs water that could be provided from alternative sources (such as process or cooling water).

The preferred usage pattern should reflect how much water the facility draws from our mains and not its internal usage. However, if we understand the facility's internal water usage, we'll have insight on potential draws from the system. You can show us that you've leveraged appropriate water efficiency and recycling opportunities within the operation.

Step 2: Planning agreement and outcomes report

For most sites – particularly sites located in large data‑centre clusters or areas with limited water or recycled water capacity – a planning agreement (PA) and outcomes report are required before your State Significant Development Application (SSDA) can be finalised.

The PA sets out:

  • the scope of work for the planning study
  • the deliverables we will prepare on your behalf
  • the information required to support your development application.

Under the PA, we will also undertake a planning study (outcomes report) to:

  • assess short‑term staged water availability
  • identify medium‑ to long‑term supply options, primarily using recycled or non‑potable water
  • define required water, wastewater, recycled water and trade waste infrastructure.

The outcomes report supports your planning approval by addressing Section 14 – Water Management Plan of the Planning Secretary's Environmental Assessment Requirements (SEARS). This enables progression to SSDA assessment.

Fee for the PA
The fee covers our modelling, planning, and reporting activities. These activities are directly related to servicing your data centre and coordinating infrastructure with forecast growth in the servicing area.

Step 3: Section 73 and commercial agreement

Once the planning study is complete and SSDA approval has been granted, you can apply for a Section 73 Compliance Certificate.

A commercial agreement will also be required to address:

  • funding of any accelerated infrastructure
  • any developer‑delivered works
  • applicable infrastructure contributions.

Infrastructure contributions for data centres are currently under review. They're expected to differ from infrastructure contributions applied to residential or commercial developments. This reflects:

  • the significantly higher water demand of data centres
  • the higher level of service required to support their operations.

Useful links

Data centres
Land development
Section 73 Compliance Certificates