Australia’s data centre development pipeline has grown by 5.2GW in six months, with Melbourne overtaking Sydney in total forecast capacity and projects outside the two largest markets accounting for a rising share of planned development, according to a new report from Data Centres Australia (DCA) and DC Byte.
The Australian Data Centre Forecast Report puts the national pipeline at 26.8GW, up from 21.6GW in April. However, the report distinguishes between projects at different stages of development, with a significant portion of the total still in early-stage planning and subject to uncertainty.
Australia has 1.6GW of operational data centre capacity across 163 facilities tracked by DC Byte. The report forecasts operational capacity will reach 3.9GW by 2030, up from the 3.2GW forecast in the previous edition.
The report’s methodology assesses project viability rather than treating announced plans or grid connection applications as evidence that capacity will be delivered. It accounts for factors including land, power, permits, developer track records, construction timelines and customer ramp-up schedules.
“Capacity under construction has doubled since our April report and more capacity has moved from early stage to committed, demonstrating continued demand in the market,” said Belinda Dennett, CEO of Data Centres Australia (above).
Melbourne overtakes Sydney in pipeline capacity
Melbourne’s total forecast pipeline has increased by 1.7GW since April to 10.7GW, exceeding Sydney’s 7.8GW. Sydney’s pipeline has fallen by 3.6GW over the same period, from 11.4GW.
The report attributes the contrasting movements partly to differences in energy availability, policy settings and approval processes. It suggests that Victoria’s Development Facilitation Program may have helped move projects from early-stage planning into the committed category more quickly than the NSW State Significant Development process.
Melbourne recorded a 1.2GW increase in committed capacity, compared with 700MW in Sydney. Melbourne’s early-stage capacity rose by 300MW to 7.8GW, while Sydney’s fell by 4.4GW to 4.2GW.
DCA said Sydney’s reduction was likely to reflect a combination of announced energy constraints, less certain approval timelines and recent policy announcements. It said Victoria’s increase may reflect faster approvals and the state government’s previous “open for business” message, although recent policy changes could affect future forecasts.
The report notes that the Victorian Government has announced new policies for data centres, along with an apparent pause on approvals in the lead-up to the November 2026 state election. It says its next forecast may show whether this has a material impact.
“The analysis shows pronounced growth in the data centre pipeline in Victoria over the last six months, likely attributable to the state government’s efforts to attract investment,” Dennett said. “We expect recent changes in policy may have an impact on whether this continues.”
The report’s figures are based on data current to 30 September 2026.
More development outside traditional hubs
The share of forecast pipeline capacity located outside Sydney and Melbourne has increased from 19 percent in the third quarter of 2024 to 31 percent in September 2026. The report includes early-stage projects in Queensland, Tasmania, South Australia and Western Australia, alongside regional developments in NSW and Victoria.
DCA expects the trend to continue as energy constraints, policy decisions and demand from AI and neocloud operators influence site selection. DCA said new workloads such as AI and neoclouds may bring different siting requirements.
“We are also seeing current energy constraints and different policy approaches influence customer and operator decisions,” Dennett said.
The report identifies the availability of energy and capital, along with the Federal Government’s proposed AI infrastructure standards, as factors to watch over the next six months.
Pipeline growth remains weighted towards early-stage projects
Of the 26.8GW national pipeline, 19.6GW is classified as early stage, up from 16.8GW in April. A further 5.2GW is committed, compared with 3.1GW six months earlier, while capacity under construction has doubled from 200MW to 400MW.
DC Byte defines committed projects as those for which it has high confidence of eventual delivery, generally because key requirements such as land, power and permits have been secured, or because the project is being developed by an operator with a reliable track record. Early-stage projects have yet to secure all the elements required for development and may not proceed.
The distinction is significant given that 52 projects in the national pipeline have announced capacity exceeding 100MW, compared with four operational data centres of that size.
The report forecasts operational capacity will rise from approximately 1.8GW at the end of 2026 to 2.3GW in 2027, 2.7GW in 2028 and 3.4GW in 2029, reaching 3.9GW by 2030.
Dennett said Australia remained an attractive market for data centre development, pointing to its industry ecosystem and large-scale renewable energy generation. She said credible forecasting was needed to inform policy and infrastructure planning as the market grows.