Data centres will accelerate the development of wind energy projects rather than extend the life of Eraring and Bayswater coal-fired power stations under government plans for the booming industry.
NSW Energy Minister Penny Sharpe said on Monday that data centres could take up 11 per cent of the state's energy needs by 2030.
"That's a challenge - but it's also an opportunity for us to underpin greater renewable energy investment into the future," she said.
"We know that we've got a lot of renewable energy projects in the system. We know that some of them - particularly wind - have had some issues in terms of getting to financial close.
"We're ... asking for an important contribution in terms of building out wind energy."
Wind energy will also be a key component of the three gigawatts of new clean energy that will be accelerated as part of the $2.5 billion Tomago Aluminium Smelter bailout announced last week.
Many of the new projects are likely to be based in the New England Renewable Energy Zone, which has been the site of recent conflict between landholders and EnergyCo over the route of new transmission infrastructure.
AirTrunk, which has proposed building a 540 megawatt data centre on the former aluminium smelter site at Kurri, is in negotiations with two potential suppliers within the Hunter-Central Coast Renewable Energy Zone.
Akaysha Energy, which is consulting on a plan to build a $10 billion outside Muswellbrook, will meet with Treasurer Daniel Mookhey on Tuesday.
The proposed project, known as the Mayfield Energy Precinct, would include a data centre campus with IT capacity of up to one gigawatt.
It would also have a grid-scale battery energy storage system (BESS) with capacity of up to two gigawatts.
The state government announced on Monday that data centres will be forced to fund new water and energy supplies under a suite of new frameworks designed to protect the state's resources and prevent households and small businesses being hit with skyrocketing bills.
Projects will also be required to enhance local community infrastructure, invest in "future industries" and commit to skills training and support jobs.
In return, proposals would be assessed within 75 days if builders comply with new guidelines.
There are more than 60 data centres already operating or under construction in NSW. Another 19 are in the planning and approval pipeline.
Industrial land in the Hunter within close proximity to the grid has been identified as an ideal location for new data centres.
AGL confirmed last week that the Bayswater Power Station would by 2033.
The company, which is developing the adjacent Liddell industrial hub, is considering incorporating data centres into the project.
"With the right settings, data centres represent a major opportunity for Australia's economy and the energy system," a spokesman said.
"While data centres are energy intensive, if managed in the right way, they can help to underwrite and support new renewable investment, improve system utilisation, and help lower costs over time.
"We continue to have broad conversations, supporting our MOU partners to undertake feasibility assessments while in parallel, determining the investment in enabling infrastructure required to prepare for these new uses on site."
Business Hunter chief executive Bob Hawes said the Hunter was well-placed to benefit from growth in the sector, particularly as part of the region's broader economic diversification.
"Data centres are an increasingly important piece of Australia's digital infrastructure and have the potential to generate investment and employment opportunities in regional areas, including on former mining and industrial sites across the Hunter," Mr Hawes said.
"However, for the Hunter, data centres are one part of a diverse and evolving economy. Their development must be considered alongside the needs of other critical industries that also rely on land, water, energy and infrastructure."
Mr Hawes said it was important that the economic opportunities presented by data centres were balanced against their potential impacts, particularly given their significant energy and water requirements.
"Done right, data centres can form part of the Hunter's next chapter of economic growth, alongside advanced manufacturing, clean energy, logistics, defence and other emerging industries that are helping diversify the regional economy," he said.
