New Data Centre in Australia Raises Water Concerns

The article was written by Angelique Donnellan.

It was also written by Xanthe Kleinig.

The story is from 7.30.

The topic is AI.

The article was published on Friday, 19 June 2026, at 5:00 am.

A new $10 billion artificial intelligence factory may be built in South Australia, creating jobs, but critics worry it will use too much water from the River Murray.

AI data centres are being built quickly across Australia, with 162 already operating and 90 more planned.

The Greens want to stop the construction of large data centres like the one proposed for South Australia.

Stefan Hajkowicz says investing in data centres is similar to the mining sector boom.

Stefan Hajkowicz says the investment in data centres is huge, like the mining sector boom.

The data centre, proposed by Nasdaq-listed tech company IREN, is planned to open in 2028 near Adelaide.

The proposed data centre would be located near a substation at Bundey.

Stefan Hajkowicz says the data centre will be one of the biggest in the Asia Pacific region.

The centre will need 800 megawatts of electricity, enough to power 800,000 homes.

The proposal would create 500 jobs during construction and 200 ongoing positions, which would help the struggling area.

The local mayor, Bill Gebhardt, says the area needs growth and young people to keep the community going.

The town of Burra is 30 minutes from the proposed data centre site.

A local school is struggling with low numbers.

If the community grows, it will help keep the school and other services open.

Megan Gill, owner of Mog's Cafe, says the data centre would be good for business in Burra.

Megan Gill says consistent business in town will be beneficial after the tourist season ends.

Another resident, Sue Ryan, is unsure about the project and has many questions.

There are concerns about water usage.

Irrigators want to know how much water the data centre will take from the Murray River.

Data centres use a lot of water to cool their machines.

It is not clear how much water the Bundey data centre will use.

IREN says the facility will not consume water on an ongoing basis and will use a closed system.

IREN claims less than 1% of the total on-site tank capacity will be depleted annually.

IREN wants to be a good neighbour and long-term partner.

The Greens have started a federal parliamentary inquiry into AI data centres.

Senator Sarah Hanson-Young is worried about the impact on the vulnerable River Murray.

Water is being pumped out of the Murray River.

Senator Hanson-Young says companies are taking advantage of Australia's cheap resources.

Jeff Knispel, who runs a citrus supplier, wants to know how much water the data centre will use.

Jeff Knispel is concerned about the data centre's water usage.

He is worried about the impact on his business and the environment.

The fact that the data centre is near a pipeline makes him nervous.

He asks if the data centre will consume a lot of water.

As the driest state and continent, water usage is a significant concern.

The Murray River is predicted to have lower flows due to below-average rainfall.

Irrigators in South Australia's Riverland, like Mr Knispel, face a 20% cut in their annual water allocation.

A worker at a citrus supplier in the Riverland region.

Mr Knispel's business may have to spend hundreds of thousands of dollars to buy water.

Every grower is trying to buy water to make up for the shortfall.

There are concerns that the community is sleepwalking into a catastrophe.

Senator Hanson-Young wants strict rules for data centre water usage.

The federal government has set out expectations for data centre companies, but they are voluntary.

Senator Hanson-Young says a tougher approach is needed.

She thinks the current principles are not enough and need to be legally binding.

Senator Hanson-Young is worried that the government is being naive about the issue.

Tim Ayres says he expects states to follow federal expectations when considering planning applications.

Federal Industry and Innovation Minister Tim Ayres says the developments are approved by state governments.

He believes Australia's water resources will cope with AI infrastructure growth.

The data centre expectations make it clear that water security plans are fundamental to the Commonwealth government's support.

Mr Ayres says data centres will lead to investment in new power generation and energy prices will not rise.

A model of data centre infrastructure.

Data centres currently use about 2% of Australia's electricity, but this is expected to increase to 12% by 2030.

This is an opportunity to drive additional electricity generation and support demand management in the grid.

Mayor Gebhardt says he understands the division over data centres but is hopeful for broad support.

Bill Gebhardt is optimistic about the benefits the proposed data centre could bring to the area.

He says the data centre would be a lifeline and a new lease on life for the community.

IREN has offered a community fund, which will help the local communities.

The company has yet to submit a development application.

The proposal has a way to go and needs to overcome some hurdles.

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The article was published on Friday, 19 June 2026, at 5:00 am.

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