Residents near a data centre in Melbourne's west are demanding remediation and financial compensation, including voluntary home buybacks.
The Victorian government yesterday unveiled a strategy for data centre construction in the state, which will not apply to data centres already built or in the pipeline.
A Senate inquiry into the impact of AI and data centres on Australian communities will hold its final day of hearings on October 1.
Residents living just metres from a sprawling, hyper-scale data centre in Melbourne's west have called for remediation and financial compensation over the ongoing impacts of pollution and potential fire risk.
It comes as a Senate inquiry on artificial intelligence and data centres today heard from residents and local councils about the impact of an influx of data centres in Melbourne's west and north.
The Victorian government yesterday unveiled new regulations to ban data centres near homes and schools, including 150-metre buffer zones, while mandating the use of renewable energy and non-drinking water.
But the rules would not be applied retrospectively, meaning projects that had already been approved or had lodged planning applications would not need to abide by the updated standards.
Tech giant NextDC's West Footscray data centre is located just 15 metres from homes.
An application to more than double the facility's size, lodged earlier this year, would not need to meet the new regulations if approved.
Another data centre, the Perri Melbourne Data Centre (PMDC), was approved by the planning minister last year and will also be situated in West Footscray, just a block away from NextDC.
Advocacy group Citizens for Tottenham, which represents people living in the suburbs of West Footscray, Tottenham and Kingsville, called for remediation, arguing Victoria's new rules were "too little too late".
Among their chief complaints are fumes and noise pollution emitted by dozens of back-up diesel generators at the NextDC data centre, which are run regularly for maintenance.
The group wants residents living within 500 metres of the data centres to be offered a voluntary buyback based on the latest Maribyrnong City Council rates notice or independent market valuation, whichever is higher.
Stamp duty and moving costs would also be covered, while households would also receive a one-off payment of $10,000 to assist with time off work for moving and "general inconvenience".
"Many people don't want to live near [the data centre], but it's not going anywhere," Citizen for Tottenham member Sean Brown told the ABC, adding that 760 homes and 2,500 residents were within 500 metres.
Research released in July by Australian software firm Airteam and Primara estimated that having a data centre located in close proximity could wipe up to $35,000 from a property's price.
The survey of 1,000 Australians found 83 per cent of respondents would refuse to buy a home near a data centre without a price discount.
Mr Brown said residents who stayed in the area should also be entitled to compensation for loss of amenity during construction, including $5,000 per year for households located at the boundary of the NextDC or PMDC facilities.
He said compensation should be funded by data centre operators or the state government, and that local residents were also considering legal action.
NextDC and PMDC developer Perri Projects were contacted for comment.
Senate inquiry chair and Greens senator Sarah Hanson-Young backed calls for impacted residents to be compensated by tech companies.
"Australians need to get something out of this," Senator Hanson-Young said.
"Compensation should be on the table, but it's also about what is the community benefit from these big AI facilities?
"Right now, the only ones benefiting are the big, trillion-dollar AI companies," she said.
The Victorian government argues data centre development will lead to job creation and investment, pointing to $5.8 billion in capital expenditure from the sector last year.
There are currently 50 data centres operating across Victoria with another 18 in the pipeline.
Among the applications still pending is a proposal for a mega data centre in Plumpton, in Melbourne’s north-west, by developer Syncline Energy.
The proposed AI hub would span 350 hectares and have a capacity of 2.4 gigawatts — more than the combined capacity of every data centre in Australia, which was 1.5 gigawatts as of March this year.
Syncline Energy's managing director Phil Galloway appeared before the Senate inquiry to defend the data centre's planned size, saying the scale was necessary in order for Australia to be globally competitive.
“This scale is being built in India, China the US, Philippines and Indonesia, and scale will become a key factor,” Mr Galloway said.
But he conceded the developer should have done more to bolster community engagement, describing opposition from local residents as "entirely valid".
Mr Galloway said the Plumpton data centre would be 75 per cent powered by renewable energy, while the remaining 25 per cent would be purchased from the grid.
Citizens for Tottenham president Jacqui Glover today appeared before the Senate inquiry.
Ms Glover, who lives directly across the road from NextDC, said while the new Victorian rules were a "good start", the government's proposed 150-metre buffer zone was insufficient.
"The diesel emissions are not going to stop at 150 metres," Ms Glover said.
"And it's too late for us — the horse has already bolted."
Hume City Council Mayor Carly Moore also criticised the buffer, telling the inquiry it did not appear to be backed by scientific research.