Tasmanian council approves major AI data centre near Long Reach

Tasmania's digital future takes a leap forward

The West Tamar Council has given the go-ahead to Firmus Technologies' ambitious plan to build a 288-megawatt AI data centre near Long Reach, a small locality about 20 kilometres north of Launceston. The project, which received council approval on August 25, 2026, is set to become one of Australia's largest data centres dedicated to artificial intelligence workloads.

Firmus Technologies, a company specialising in high-performance computing infrastructure, has been scouting locations in Tasmania for several years, attracted by the state's relatively cool climate, abundant renewable energy from hydro and wind, and existing fibre connectivity. The Long Reach site, zoned for industrial use, sits close to the Tasmanian electricity grid and the Basslink interconnector, offering potential for low-latency connections to mainland Australia.

The facility will be built in phases, with the full 288 MW capacity expected to come online by 2030. It will house thousands of servers running advanced AI models, including training and inference workloads for clients in research, defence, and commercial sectors. Firmus estimates the project will create 500 construction jobs and 150 permanent operational roles, with a further 200 indirect jobs in the region.

Concerns over energy and environment

While the council's planning committee voted unanimously in favour, the approval has not been without controversy. Local environmental groups have raised concerns about the facility's water usage for cooling, the impact on the Tamar Valley's biodiversity, and the strain on the region's electricity supply. Tasmania already faces peak demand challenges, and critics argue that a 288 MW data centre could consume more power than the entire city of Launceston.

Firmus Technologies has countered that it will use state-of-the-art liquid cooling technology to reduce water consumption and plans to offset its energy use through a combination of on-site solar and battery storage, as well as power purchase agreements with existing renewable generators. The company has also committed to a community benefit fund and a traffic management plan to mitigate construction impacts.

Next steps

The council's approval is subject to a number of conditions, including a detailed environmental management plan, noise controls, and a requirement to submit a traffic impact assessment. Firmus must now secure development approvals from the Tasmanian government, including a major project permit, before construction can begin. The company expects to break ground in early 2027.

Why This Matters

The approval signals Tasmania's emergence as a potential hub for AI infrastructure, leveraging its renewable energy advantage. This could attract further tech investment to the state.
For local residents, the project promises jobs and economic activity but also raises concerns about energy prices, environmental degradation, and the character of the rural Tamar Valley.
The decision could set a precedent for how Australian councils balance large-scale tech projects with community and environmental interests, particularly in regions with limited grid capacity.

Background

Tasmania has long marketed itself as a renewable energy powerhouse, with hydroelectricity supplying around 80% of its power. In recent years, the state government has actively courted data centre operators, offering incentives and streamlined approvals. The Basslink cable, completed in 2006, connects Tasmania to the National Electricity Market, allowing export of surplus power and import when needed. However, the cable has reliability issues, and during peak demand, Tasmania's grid can be under strain. Firmus Technologies first proposed the Long Reach site in 2024, conducting feasibility studies and community consultations. The project garnered support from the Launceston Chamber of Commerce but opposition from the Tamar Valley Conservation Group. The West Tamar Council's planning committee held public hearings in mid-2025, hearing from both proponents and objectors. The unanimous approval came after Firmus agreed to additional conditions, including a biodiversity offset plan and a commitment to use recycled water for cooling.

Key Perspectives

Firmus Technologies: The company argues the data centre is essential for Australia's sovereign AI capability, providing low-latency compute close to research institutions and government agencies. They highlight the job creation and the use of 100% renewable energy, with a goal of net-zero operations by 2030. They also note that the site's location near existing fibre routes reduces the need for new infrastructure. West Tamar Council: The council's planning committee found that the project complies with the local planning scheme and that the economic benefits outweigh the environmental impacts, provided strict conditions are met. They emphasized the need for ongoing monitoring and community engagement. Critics (environmental groups and some residents): They question the true sustainability of the facility, pointing out that data centres are notoriously energy-intensive and that water cooling could stress local waterways. They also worry about light pollution, noise, and the potential for increased traffic on rural roads. Some argue that the council lacked the expertise to properly assess the complex technical and environmental implications.

What to Watch

Tasmanian government's major project approval process: Firmus must still obtain a permit from the state's Department of State Growth. Any delays or added conditions could affect the timeline.
Energy market impact: Watch for announcements from TasNetworks about grid upgrades or capacity constraints. If the data centre pushes demand near limits, it could lead to higher electricity prices for residential and small business customers.
Community legal challenge: Environmental groups have indicated they may seek a judicial review of the council's decision. A court challenge could delay construction for months or years.
Firmus Technologies' funding: The company has not disclosed full financial details. Its ability to secure financing for a $2 billion+ project will be a key indicator of progress.

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