South Australia Data Centre Plan Sparks Water and Security Fears

IREN, an Australian tech company, has proposed an 800-megawatt data centre in South Australia's Mid North, near the Bundey substation. The $10 billion project would be one of the largest in the Asia Pacific. Locals and environmental groups are fighting back, worried the development will drain water from the stressed River Murray.

IREN (ticker IREN, Alpha Score 67) says the facility will use a closed-loop cooling system that circulates coolant in a sealed loop and dissipates heat through the air, not water. Co-founder and CEO Daniel Roberts told the ABC the upfront water requirement is "a few Olympic-sized swimming pools."

Australian National University environmental accounting associate professor Michael Vardon said closed-loop systems still need regular topping up. "It's not as water-intensive as other technologies, it's still absolutely massive," he said. IREN did not confirm exactly how much water would be needed or where it would come from.

Water and the Pipeline

Regional Council of Goyder mayor Bill Gebhardt said he understood the water would come via the Morgan to Whyalla pipeline, which already supplies drinking water to more than 130,000 homes across the Mid North, Yorke Peninsula and Eyre Peninsula. An IREN spokesperson said after the initial fill, less than 1% of the total on-site tank capacity would be depleted annually. Five different state agencies would need to approve any new water allocation from that pipeline.

Teresa ter Bogt, secretary of the Bookmark Creek Action Group in Renmark, said drawing large volumes from the River Murray is a concern. "When we get a drought, our growers and our environmental water are all cut, we don't get a full allocation," she said. "Without a healthy river, we won't have a healthy community."

Community Pushback

Clayton Heinrich, who owns a 1,000-hectare farm in Bright three kilometres from the site, said the development "came out of the blue." He worries the night sky he once shared with campers will disappear. "I used to get people out here to have a look at the stars ... camping out here, I guess those days may be gone," he said.

Tori Widmer, who runs a cafe in the nearby town of Morgan, said the town only heard about the proposal in recent days. "We've already got a shortage of rentals in Morgan, so are they going to build purpose-built accommodation for these workers?" she asked.

Henry Schutz, a farmer in Point Pass 25 kilometres from Bundey, raised a different concern. "With the conflict going on around the world at the moment, my first thought was we're actually making ourselves quite a big target," he said. "We've got the water, the power, and now the AI centre. If that's taken out for some reason, that's going to hurt our state heavily."

Confirming factors for the pushback

A formal state review could reveal the project's actual water draw. If a drought triggers cuts to River Murray allocations, the dispute would intensify. IREN has not yet submitted a development application, so public consultation has not begun.

Invalidating factors for the pushback

IREN could demonstrate that the closed-loop system requires negligible annual topping up, or it could secure water from a non-River Murray source such as recycled groundwater. The company says it plans to support additional renewable energy generation as the project expands.

A state government spokesperson said it is working with IREN on a framework to manage large-scale data centre proposals. "Data centres are a significant opportunity for long-term investment in future jobs and capabilities," the statement read. IREN said it had been "encouraged" by the government's response and intends to engage with the local community. No timeline for the formal assessment has been set.