On Thursday 1 June 2023, there are a range of important changes which will take effect to State Environmental Planning Policy (Planning Systems) 2021 in respect of data centres and warehouse or distribution centres.
In June 2021, the then State and Regional Development SEPP was amended to temporarily allow more data centres and warehouses to be assessed as State Significant Development (SSD). This was in direct response to COVID 19 and was viewed as an appropriate and necessary measure to contribute to economic development and employment. The thresholds that were introduced in 2021 were as follows:
– data centres to 10 megawatts total power consumption to be assessed as SSD, then to 15 megawatts from 1 June 2023
– warehouses to $30 million CIV to be assessed as SSD, then to $50 million CIV from 1 June 2023
With the changes to thresholds imminent in June 2023, the question begs as to what was achieved by the previous reductions to these thresholds, and did the changes cause more harm than good?
Any developer, planner, or consultant generally that plays in the SSD space is only too aware of the influx of SSD applications that have been lodged across these sectors in the past couple of years. It is apparent that the changes in legislation were not matched with capacity and resourcing to process such proposals and the pipeline of applications pending determination is exhaustive causing strain and uncertainty on the sectors.
Moving forward and in a time of ever escalating constructions costs, to ensure that proposals which are of genuine state significance are given the due consideration and prompt attention, it is only considered reasonable that these thresholds change again, to move north.
What is the appropriate threshold? This is a vital matter for consideration and one which requires expert input from our assessors and the industry more broadly.
A warehouse in Western Sydney that generates hundreds, if not thousands of jobs, should not be held up at the expense of another project which is marginal in terms of qualifying under the CIV provisions. Similarly, the megawatt capacity limit for data centres needs to be reviewed to ensure these vital pieces of critical infrastructure are given the due attention and expedited assessment they deserve.
Our assessors do a fantastic job under the circumstances; however, the policy settings need to match what is genuinely intended under the SSD framework and ensure these projects which are legitimate and highly important to the state of NSW, can move forward without delay.
An integrated forum on this matter is needed to keep the system accountable!