Western Sydney's $1.2 billion water recycling plant sparks concerns over data centre usage

A new $1.2 billion wastewater treatment facility in Western Sydney has raised concerns about the use of recycled water by data centres. The Badu Yarragul Water Resource Recovery Facility at Kemps Creek, which opened last month, has the capacity to treat 35 million litres of wastewater daily, with plans to double this amount as the city grows.

The facility's environmental impact statement and environment protection licence do not explicitly mention data centres, but they do reference "industrial and business use". Professor Stuart Khan, an expert in water quality and treatment, has expressed concerns that the demand from data centres was not accounted for in the Greater Sydney Water Strategy plan.

"We have identified that we can get up to 140 gigalitres per year … from recycled water schemes into the future over the next couple of decades," Professor Khan said. "If we take that away from customers, we give it to a new industry that wasn't accounted for in the strategy, then we need to think about where we are going to replace that future water supply from."

Sydney Water managing director Darren Cleary said the facility would produce high-quality treated water suitable for non-drinking purposes, including for data centres. He emphasized that the water utility was investing $14 billion in capital over the next five years to ensure demand was met.

"There's a real opportunity for this to be used for data centres," Mr Cleary said. "The infrastructure that will be delivered for them [data centres] will have to be done in a way that doesn't affect the services we provide to the broader customer base."

However, Sanaa Shah, a senior campaigner for Sweltering Cities, expressed concerns that water use had not been adequately considered in data centre proposals, and local residents were worried they would be caught short.

"They remember the drought period, they remember water restrictions and they don't know if these rules are going to be equally applied to data centres," she said. "What we're witnessing right now is a frantic, reckless data centre boom … there's a lot of uncertainty around these proposals."

With over 60 operational data centres across NSW, and 18 data centre projects valued at $61.22 billion in capital investment in the planning pipeline, the issue of water supply for data centres is becoming increasingly pressing.

Professor Khan questioned whether the facility should supply recycled water for the city's drinking water supply, instead of data centres. Sydney Water confirmed that purified recycled water for drinking was a possibility as part of its long-term plan, but a decision would need to be made within the next 10 years.