Data centre gas plant consultation skipped after legal threat, staffer says

In short:

The NSW Department of Planning skipped consultation when issuing application rules for a proposed gas-fired power plant to run a data centre campus in the Southern Highlands.

A Greens MP says an email stating that a legal threat from the developer prompted the decision is "massive cause for concern".

What's next?

The planning department says the proposal is still in very early stages, and consultation will occur later in the planning process.

The NSW planning department has admitted it failed to consult key agencies before setting assessment requirements for a major gas plant to power a data centre.

The admission follows an email from a senior planning official that said consultation was skipped because the developer threatened legal action.

The proposed 675-megawatt plant at Moss Vale would be one of the largest gas-fired power stations in NSW and would run a data centre campus.

In December 2025, the NSW Department of Planning, Housing and Infrastructure (DPHI) provided a list of issues the developer was required to investigate before it could apply for an approval known as the Secretary's Environmental Assessment Requirements (SEARs).

A community group then emailed the department asking whether agencies such as the NSW Environment Protection Authority (EPA) and Sydney Water had been consulted.

In a response seen by the ABC, a senior planning official wrote that the department had asked the developer for more information, but had to issue the requirements "quickly and without consultation because the proponent threatened legal action".

DPHI has a statutory requirement to issue the SEARs within 28 days of the scoping report being lodged.

Greens MLC and planning spokesperson Sue Higginson said the revelation was "shocking".

"That is massive cause for concern," she said.

"The idea that all a corporation needs to do is threaten litigation and then get the response they need — that is a coercive move and if our planning system is so easily coerced, that indicates a deep, broad problem."

The applicant for the development is Nakar Property, which is the parent company of data centre company Cloud Carrier.

A Cloud Carrier spokesperson said in a statement that the SEARS process and consultation with agencies was "ultimately a matter for the department".

"Any legal communications relating to aspects of the planning process are confidential and/or privileged," they said.

"We do not intend to comment on those communications and do not waive any privilege attached to them."

Department admits mistake

Under the planning rules in place in December 2025 the department was required to consult relevant public authorities when preparing the SEARs.

That rule was removed from the regulation in July 2026.

A DPHI spokesperson admitted the department had made a mistake.

"In error, public authorities were not consulted before the SEARs were issued but they will be consulted during preparation of the Environmental Impact Statement (EIS) — and again, when the DA is lodged," the spokesperson said in a statement.

DPHI did not respond to questions about whether the threat of legal action influenced its decision not to consult agencies.

The spokesperson said the SEARs required the applicant to "consult with community, Wingecarribee Shire Council and relevant government agencies including the EPA when preparing the EIS".

"If a development application and EIS is lodged, the proposal will undergo a rigorous all-of-government assessment, and the community will have the opportunity to have their say," they said.

But Ms Higginson said the drafting of SEARS with input from agencies was "a critical step" in the planning process.

"This idea that we just consult the agencies later, it becomes quite a token process," she said.

"This is why many communities across New South Wales are losing trust and losing faith in the planning system."

In a statement, Planning Minister Paul Scully defended the government’s data centre planning and said the power plant is at the earliest stages of the planning process.

Email read in parliament

The email was read to a Senate inquiry into AI and Data Centres by Jessica Ryall, a member of protest group Stop the Gas Plant, on Tuesday.

"For this large, state-significant development, the EPA has not yet been consulted, Sydney Water hasn't been consulted, the gas company hasn't been consulted, council, Indigenous landholders, nobody," she told the inquiry.

"That rule book was published by the department without any of those consultations."

The federal government has indicated it intends to rule out fossil-fuel-powered data centres in legislation to be introduced early next year.

Last week Climate Change and Energy Minister Chris Bowen said "firming" gas power would be allowed, but data centres would need to "bring their own renewable energy".

Last month the NSW government issued guidelines for data centres that offered faster processing times for projects powered by renewable energy.

But at the end of August Mr Scully confirmed that the department could not prevent other projects, such as the Southern Highlands Data campus, being assessed on merit.

Cloud Carrier previously told the ABC it intends to provide high-level data storage to support AI computing at the Moss Vale site.