What’s the deal with the two data centres proposed near Tailem Bend?

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The AI revolution is coming to the Murraylands, with two major data centres proposed to be built in the region.

A data centre is essentially a warehouse full of computer processors, designed to perform the functions that make cloud storage and AI systems work, and connected to the internet in much the same way as a power plant might be connected to the grid.

Every time you save a file in Dropbox or ask Chat GPT to create an image, you’re using a data centre somewhere.

Much fanfare has been made about plans by a company called Firmus to build one such facility north of Tailem Bend.

In addition, Murray Bridge News can reveal that another company, Skylab Australia, plans to build a second data centre at Cooke Plains.

The two facilities would have quite different operating models, with one much bigger in scale and the other co-located alongside a new solar farm – more on that below.

Neither data centre has yet received development approval from the state government.

But Premier Peter Malinauskas has indicated his strong support for what he described as a “generational economic opportunity”, even announcing plans for a state Data Centre and AI Infrastructure Act that would streamline the approval process.

Artificial Intelligence and Digital Economy Minister Chris Picton suggested South Australia had a chance to lead the charge.

“Data centres are the backbone of the digital economy and will play a critical role in supporting the growth of artificial intelligence,” Mr Picton said.

“South Australia has an opportunity to become a preferred destination for next-generation digital infrastructure.

“The (state government) will help ensure that growth occurs in a way that is sustainable, coordinated and delivers lasting value for the state.”

How will that play out in practice?

Here’s what we know so far.

Firmus promises ‘sovereign infrastructure for AI training and inference’

Firmus’ data centre would form part of its multi-billion-dollar Project Southgate, a national effort to develop “sovereign AI infrastructure” for Australia.

The facility – at Kepa or Naturi – would be one of two which the company plans to build in South Australia, with the other up near Port Augusta.

Combined, the two facilities would consume about 2.7 gigawatts of energy – about 20 times the output of the solar farm and battery system at Tailem Bend.

On Tuesday, Firmus announced it had purchased the rights to enough energy for about a quarter of its needs from a company which would develop new solar and battery systems for the purpose.

It would ask its power suppliers to develop twice as much capacity as required, it said, with left-over energy to be sold onto the grid.

Meanwhile, its facility would use “up to 99 per cent less (water) than a conventional data centre”, Firmus promised, as it would rely on non-water-based methods to absorb the heat produced by its thousands of computer processors.

Firmus’ only operational facility so far is in Launceston, Tasmania, in a climate about five degrees cooler than Tailem Bend.

Still, CEO Oliver Curtis was bullish.

“We’re building our AI factories in regional South Australia because they’re the right locations for large-scale AI infrastructure and the energy investment that goes with it,” he said in a statement.

“This is about investing in regional South Australia: creating new infrastructure, supporting local jobs and strengthening the electricity system while building the capacity Australia needs for the next generation of AI.

“We’re committed to paying our own way and ensuring these projects deliver lasting benefits for the communities that host them.”

Murray Bridge News is seeking more information from Firmus.

Skylab Australia works away quietly in the background

Meanwhile, another company, Skylab Australia, has also proposed to build a second facility on disused farmland southeast of Tailem Bend, at Cooke Plains.

It would have a somewhat smaller but still significant 800-megawatt capacity, offset by energy generation facilities which would be built at the same site: a 250MW solar farm, a 200MW grid-scale battery and possibly a gas power plant.

Skylab’s partner in the project would be “an experienced data centre operator” who was not yet willing to be publicly identified, CEO Cameron Meekin told Murray Bridge News.

The project would be developed in stages, with the first stage to come online in the third quarter of 2028.

Mr Meekin suggested he was most passionate about the power generation side of the project, since that was the industry in which he had spent more than 20 years.

“We’re developing a power-driven proposal around a data centre,” he said.

“I’m not just … going to use whatever is there and rely on everybody else – we started with power and we’re adding a data centre on.”

The facility would hook into SA Water’s newly upgraded mains pipeline; Skylab would be willing to fund further upgrades, including construction of a pumping station to increase pressure, if required.

However, Mr Meekin said the Cooke Plains data centre would use a closed-loop cooling system to minimise its water use, with opportunities for water to be retained and recycled.

Planning had been ongoing for about 12 months and was a fair way down the track, he said.

Land had been acquired, discussions held with the Coorong and Murray Bridge councils, and thought given to how funds could be shared with the community, including through local football clubs: “We usually put the landowners and the community first.”

The project would create about 500 to 700 short-term jobs during construction, and up to 50 on an ongoing basis – a significant number in a community like Cooke Plains, population 69.

More technical details about the proposal will become available when a development application is filed in the next 12 months.

Information vacuum prompts uneasy feelings

The idea of data centres being built in the Murraylands has prompted unease in local communities ever since The Australian broke the story of Firmus’ interest in the region in May.

With renewable energy developments already deeply unpopular in some local quarters, could data centres be a bridge too far?

The main criticisms brought up in community Facebook groups for Tailem Bend and Murray Bridge have been around power, water and noise, mirroring the concerns brought up in other communities around Australia.

Asked what they thought about data centres, commenters said things like:

• “This will provide little to no benefit for the local community – (it will) cause power prices to rise and potentially use a lot of water for cooling”
• “Don’t they use an enormous amount of electricity?”
• “What pros do they even have? All I see are cons”
• “A lot of ifs would need to be met before I would be happy with one near my own town”

However, running through many comments was the suggestion that communities simply didn’t yet know enough about this new type of development.

“I don’t know enough about them to have an informed opinion,” one commenter admitted.

“I would like to know more about their effects on the environment.”

“There needs to be more understanding about what they do, how we use them, what the impacts are to the local community and environment and what other options/alternatives there are,” said another.

Belinda Dennett, CEO of industry lobby group Data Centres Australia, said data centres were “an essential enabler for our modern economy, supporting everything from online conveniences to critical emergency services”.

They also generated more economic value per unit of energy consumed than mining or manufacturing: $12.6 billion per terawatt hour.

However, she acknowledged that overall energy consumption remained a “significant” challenge for the sector.

Data centres already use approximately 2% of Australia’s energy, the same amount as all of the nation’s shopping centres put together.

That figure is expected to triple in the next four years.

For that reason, the roll-out of data centres has been criticised by organisations including Greenpeace, which described them as “energy vampires”; and in an online petition signed by more than 5600 South Australians.

One thing we do know: neither of the two data centre proposals in the Murraylands has anything to do with the proposed land zoning changes announced by the Murray Bridge council last week.

In fact, both proposals would bypass councils entirely, with decisions about their approval entirely up to the state government.

Murray Bridge News will follow up on this story as more information becomes available.

• More information: For the two proposals, visit firmus.co and skylabgroup.com.au. For the industry more generally, visit datacentres.org.au.

Note: Murray Bridge News avoids the use of generative AI technology and discloses its use where applicable, per our current editorial policy.