Data centre gas plant could be mothballed after two years, court told

A gas-fired power station proposed for the NSW Southern Highlands could be mothballed once the grid can meet the energy demands of an onsite data centre, a court has heard.

The NSW Land and Environment Court is considering an appeal by developers Nakar Property, after Wingecarribee Shire Council refused its development application for a 16-megawatt power station and battery energy storage system in Moss Vale.

The station is one of three planned to power a data centre campus on site proposed by Sydney company Cloud Carrier.

Barrister James Smith, acting for Nakar Property, told the court the power plant was needed to provide constant power for customers using the centre.

"[Cloud Carrier's] investment in computers is circa a $1 billion; the fundamental requirement is firm supply," Mr Smith said.

"It's akin to enrolling your child in school without any teachers; Cloud Carrier can't sell any product unless there is firm supply."

The second day of hearings before Commissioner Nicola Targett came after the court travelled to Moss Vale to inspect the site of the $23 million project on Tuesday.

In his opening submissions, Mr Smith said developers would stop using gas power as soon as a reliable supply of energy from the grid could be secured.

"The cost savings per year via connecting to the grid is approximately $14 million per year," he said.

"There is clear financial incentive to use the grid when that power becomes available. The issue is there is not sufficient supply."

Referencing expert reports, Mr Smith said the power plant was projected to emit less greenhouse emissions than if it were powered by the grid until approximately 2029.

Grid touted as a 'panacea'

Addressing Commissioner Targett, barrister Michael Staunton, for Wingecarribee Shire Council, said that power supplied by the grid had been touted as a "panacea" to the project, but not investigated thoroughly.

"All of that work and investigation should have been done, and you'll find when you get to the documents, it hasn't been," Mr Staunton said.

After an adjournment, Wingecarribee Shire Council tendered draft conditions of consent in the middle of the hearing.

These included a new requirement that canopy trees be planted across approximately 40 per cent of the development site.

Expert air-quality, electrical and engineering consultants appeared as witnesses for cross-examination about reports they had prepared for the project.

Mr Staunton argued during cross-examination that the project would not have the secure power needed to fill the full capacity of servers in the proposed data centre for two years, when an upgrade of a nearby power substation operated by Endeavour Energy would be completed.

"You've got no firm supply for two years," Mr Staunton said.

"That time could be spent negotiating with Endeavour Energy while you wait for the permanent connection."

The matter will return to court on Thursday for a third day of hearings.