The NSW Government is committed to supporting economic recovery and employment opportunities following the COVID-19 pandemic. The NSW Planning system is an essential tool to accelerate the delivery of projects, create jobs, and keep the economy moving.
On 1 June 2021 amendments to the State and Regional Development SEPP commenced to temporarily allow more warehouses and data centres to be assessed as State significant development (SSD). Later in 2021, a planning land use definition for data centres was introduced into the Standard Instrument, making it a type of high-technology industry. In December 2022, the Planning Systems SEPP and Transport and Infrastructure SEPP were updated with the new data centres term. These changes provide a clearer and more certain planning pathway for warehouses and data centres.
Why focus on warehouses and data centres?
The department has identified warehouses and data centres as types of development well placed to support the State’s short-term economic recovery from the COVID-19 pandemic.
The demand for data centres and warehouse development is growing due to rapid technology advancements and a boom in e-commerce sectors. This is coupled with a need for larger off-site data storage and a shift to keeping business locally within NSW.
Warehouses and data centres are quick to build and generate a high number of jobs that will help the State’s economic recovery.
What are the changes to SSD thresholds?
The amendments change the way SSD thresholds for development of data centres are measured from capital investment value (CIV) to total power consumption. These changes will more accurately reflect the scale, complexity and potential impact of this type of development.
The amendments will temporarily change the SSD threshold for:
- data centres from $50 million CIV to 10 megawatts total power consumption (which roughly equates to a CIV of $40 million) for a two-year period, then to 15 megawatts after that.
- warehouses from $50 million CIV to $30 million CIV for a two-year period, then reverting to $50 million CIV.
Data centres planning framework
A new data centres land use term has been introduced to create certainty and consistency in characterisation, permissibility and approval pathways. Data centres were previously referred to in SEPPs as a 'storage premises used for storing data' and there was inconsistency in how they were being characterised and assessed in development applications. The new term specifically defines a data centre and makes them a type of high-technology industry.
Land use definition
A land use term for data centres was added to the Standard Instrument—Principal Local Environmental Plan in 2021. The definition is:
data centre means a building or place the principal purpose of which is to collect, distribute, process or store electronic data using information technology.
Data centres are a type of ‘high-technology industry’, which itself is a type of ‘light industry’. The definition for ‘high-technology industry’ has been amended to explicitly state that data centres are a sub-type.
The State Environmental Planning Policy (Transport and Infrastructure) 2021 stipulates that data centres are permitted with consent in the following zones (or equivalent zones) across NSW:
- B5 Business Development
- B6 Enterprise Corridor
- B7 Business Park
- IN1 General Industrial
- IN2 Light Industrial
- IN3 Heavy Industrial
- E3 Productivity Support
- E4 General Industrial
- E5 Heavy Industrial
A Local Environmental Plan may also make data centres permissible in zones other than those listed above. The land use table may specifically identify data centres as being permissible in a zone, or it may be permissible because the parent terms high-technology industry or light industry are permissible.
Planning Approval Pathways
The approval pathways for data centres are:
- State Significant Development (SSD) – Data centres that have a total power consumption of more than 10 megawatts (or 15 megawatts after 31 May 2023) are SSD. SSD applications are lodged to the Department of Planning and Environment and determined by the Independent Planning Commission or the Minister.
- Regionally Significant Development (RSD) – Data centres that do not meet the SSD criteria and have a Capital Investment Value of more than $30 million are RSD. RSD applications are lodged to councils and determined by a Sydney district or regional planning panel.
- Local Development – Data centres that do not meet the criteria for RSD or SSD are local development. Local development applications are lodged to and determined by councils.
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Page last updated: 23/01/2023