LGA calls for councils to have a stronger voice on data centre planning

LGA has made a submission to the Federal Parliamentary Inquiry into Artificial Intelligence and Data Centres, highlighting the need for councils to have a meaningful role in planning and decisions about data centre development in their communities.

The Senate Environment and Communications References Committee commenced the Inquiry in May 2026, chaired by South Australian Senator Sarah Hanson-Young. The Inquiry is examining the effectiveness of existing regulatory frameworks and the potential impacts of AI and data centres on communities, industries, the environment, water and energy.

LGA recognises the significant opportunities AI and data centres can bring, including economic growth, investment and jobs. However, their rapid expansion also presents challenges for local government, including increased demand for energy and water, land use pressures, impacts on local infrastructure, waste management and community concerns.

South Australia’s data centre sector is still developing with around 12 operational data facilities across state.  However, the scale of proposed projects – including an 800MW facility at Bundey – highlights the need for planning and regulatory frameworks that can effectively manage the long-term impacts of these developments.

LGA’s submission identifies a range of issues for consideration, including:

• increasing demand for electricity and pressure on energy infrastructure
• impacts on local infrastructure and services
• greenhouse gas emissions and the need for additional renewable energy generation
• significant water consumption and the importance of water security
• land use and potential impacts on agricultural, residential and environmental land
• noise, lighting, visual and heat impacts on nearby communities
• increasing volumes of e-waste and battery waste
• meaningful community consultation and opportunities for local benefit sharing.

LGA has raised concerns that existing planning and assessment frameworks may not be sufficiently equipped to address the unique and cumulative impacts of large-scale data centre developments.

The submission highlights the need for councils to have meaningful opportunities to participate in planning and assessment processes, particularly for major developments that can have long-term impacts on local infrastructure, services and communities.

It also calls for a national strategy for AI and data centre infrastructure that integrates energy planning, water management, regional development and climate targets.