- Singapore-based Zerra DC has proposed a $31.9 billion hyperscale data centre in Queensland’s Western Downs that could consume up to 47 gigawatt-hours of electricity a day, or about 25% of the state’s average daily energy use.
- Experts and stakeholders say the project could accelerate investment in new power generation, but they also warn that developers must protect grid stability, consumers, farmland and local communities.
Singapore-based developer Zerra DC has proposed a $31.9 billion hyperscale data centre on a feedlot in Queensland’s Western Downs that could consume up to a quarter of the state’s average daily electricity use as Australia prepares for rising energy demand from artificial intelligence.
Zerra DC plans to develop the Western Downs Digital Park on a 725-hectare site near Dalby, about 250 kilometres west of Brisbane. The company submitted its development application to the Western Downs Regional Council, which now faces the task of assessing what could become Australia’s largest proposed data centre.
The four-phase project could reach a peak capacity of 2.16 gigawatts, matching the electricity demand of approximately 1.5 million average Australian households. At full capacity, the facility could consume about 47 gigawatt-hours of electricity each day, compared with Queensland’s average daily energy consumption of about 170 gigawatt-hours.
Electro-mechanical engineer and University of Southern Queensland associate professor Andreas Helwig described the projected demand as an “enormous amount of energy” and warned that the project could test Australia’s ability to power the rapid expansion of AI computing infrastructure.
“Getting this wrong will impact grid stability and cost to consumers,” Dr Helwig said.
Climate Finance Energy director Tim Buckley said Australia must match the growing electricity demand from AI and data centres with major investments in new power generation. He said the rapid growth of the sector could attract significant capital to regional and rural communities.
“The beauty of the land grab in the data centre gold rush that’s underway right now is that capital is pouring in,” Mr Buckley said.
The project remains at an early stage. The council could take years to complete the approval process, while developers could spend four to six years building the facility after receiving the necessary approvals.
Zerra DC said the Western Downs site offers strategic access to major energy infrastructure. Three gas-fired power stations operate near the proposed development, while solar and wind projects also operate in the wider region. The site also sits near a major substation that serves as a critical electrical junction for power flows to south-east Queensland and New South Wales.
A Zerra DC spokesperson said the digital park would connect directly to the substation instead of drawing electricity through Ergon Energy’s local distribution network that serves nearby towns. The direct connection could allow the project to access large-scale generation and transmission infrastructure without placing its full demand on local distribution systems.
The project has also intensified debate over the energy sources Australia should use to power the expanding data centre industry. The federal government has proposed renewables as the national standard for data centre power, while the Queensland and Northern Territory governments have supported a broader mix that includes gas and coal.
Queensland Premier David Crisafulli has promoted an “energy-agnostic” approach that would allow data centres to use different energy sources while developers add new generation capacity alongside major projects.
“By virtue of doing that, it can in fact help us drive down power prices,” Mr Crisafulli said during a recent visit to the United States, where he met with AI companies.
Mr Buckley said gas could play an “important small and declining” role in the sector, primarily by supporting renewable generation when required. However, he argued that Australia should not rely heavily on fossil fuels to power future data centres.
“We need to embrace these industries of the future, but we’ve got to make sure they’re not powered by industries of last century,” he said.
The proposal has also drawn attention from agricultural communities across the Western Downs. Cotton and grain grower Liza Balmain, who represents the anti-gas group Save Our Darling Downs, said previous energy developments had affected farming operations and groundwater in the region.
Ms Balmain said she did not oppose data centres but wanted governments and developers to establish clear guidelines covering the natural resources and infrastructure the facilities would require. She warned that large industrial developments could divide communities if developers failed to address local concerns.
“As we’ve seen with coal seam gas, it can fracture communities,” she said.
She urged decision-makers to consider the long-term impact of the project before granting approval.
“You have to question what is the long-term legacy benefits for the communities that are being expected to absorb those impacts,” Ms Balmain said.
Western Downs Regional Council Mayor Andrew Smith welcomed the proposal and described it as the beginning of a new era for the region. He said the council would consider the development application after its planning team completed its assessment and addressed the required regulatory and environmental issues.
“We need to be looking ahead at what’s going to sustain this region,” Cr Smith said. “We’ve got a perfect mix of coexistence of ag [agriculture] and energy.”
Cr Smith said the Western Downs already serves as Queensland’s “energy capital” and has the infrastructure and economic base to support major projects. He also confirmed that discussions with Zerra DC about community benefit agreements had already begun as the council considers the project’s potential economic and social impact.
The proposed Western Downs Digital Park now stands as a major test of how Australia will balance the AI-driven surge in electricity demand with grid reliability, new generation investment, climate targets, agricultural interests and community benefits.