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Goodman Group withdrew its state-significant application for an $800 million, 81-megawatt data centre in Lane Cove West after resident outrage and concerns from Sydney Water and Ausgrid about infrastructure strain, electrocution and fire risks.
Goodman Group has abandoned its plan for a hyperscale data centre on Sydney's north shore after outrage among residents, in a case that has become a flashpoint for the spread of artificial intelligence infrastructure across the country.
The industrial property giant confirmed the withdrawal in a letter to the NSW government on Monday. The proposal, known as Project Mars, involved construction and 24/7 operation of an $800 million, 81-megawatt data centre that had been placed on public exhibition in March. It would have required the demolition and excavation of four existing warehouses at the site.
Goodman cites policy changes for withdrawal
Goodman's head of planning, Guy Smith, confirmed the company was withdrawing the application and cited emerging federal and state policy among the reasons for abandoning the development. The letter said the policy and regulatory environment for large-scale data centre development had evolved significantly. Goodman said it had carefully considered those changes together with feedback received through the planning process, including the views of the local community. The withdrawal followed sustained opposition from residents and formal concerns from utility providers.
The 28-metre-tall Project Mars data centre would have been located within the Lane Cove West industrial area. The site is bordered by a park, low-density homes 50 metres to the east, and Lane Cove West Public School about 160 metres north-east of the site. The proposal not only sparked backlash from residents. Utility providers Sydney Water and Ausgrid were concerned the development would strain existing infrastructure and increase electrocution or fire risks.
Goodman Group was also asked about the proposal in federal parliament, but the appearance of senior leaders via audiovisual link was plagued by technical problems. In a letter to the planning department in May, Ausgrid raised issues about the compatibility of the data centre with existing infrastructure. It required due consideration be given particularly in relation to risks of electrocution, fire risks, and cited other noise and visual amenity impacts.
Data centres require massive water and power
Data centres are large, energy-intensive facilities requiring uninterrupted power and a constant supply of potable water to cool servers. At capacity, Goodman had anticipated Project Mars would have used about 35 litres of water per second during peak times and about 1.4 million litres per day. Sydney Water said in a submission it was unable to support progression of the data centre without more detailed planning assessments of water demand and wastewater impacts.
The state-owned corporation said Project Mars would have heaped pressure on the existing drinking water system, which in its view had limited capacity to service the development. Both utility providers' doubts illustrate a pattern of concerns that emerge when data centre developments outpace upgrades to critical infrastructure, strained by population growth and climate change. The global AI boom has boosted demand for data centres with greater capacity in Sydney.
Tension between AI expansion and infrastructure
There are 41 state-significant projects across the city in the development pipeline, of which 18 have been approved. The abandoned Lane Cove West project highlights the growing tension between rapid AI infrastructure expansion and local infrastructure capacity.
brisbanetimes 
smh:Project Mars set off a war of words. Now the AI data centre is wiped off the face of earthThis story was compiled and edited by the HeadTopics newsroom and HT AI from the reports above.
Goodman Group Lane Cove West Sydney Water Ausgrid Concerns AI Data Centre Infrastructure
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