A mega data centre on land formerly used by the Kurri Kurri aluminium smelter could be up and running in 14 months, planning documents show.
The project, which is proposed to be built at Hart Road, Loxford, would employ 500 people during construction and 250 once complete.
A scoping report lodged by ADW Johnson Pty Ltd shows the project would consist of a two-storey building with a total floor area of 44.2 square metres.
Two substations, a switchyard and an electrical infrastructure building would also be constructed.
The 540 megawatt project is the second major data centre proposed for the Hunter in the past month.
It follows the news that an international consortium was about to lodge a scoping report for a $10 million data centre in Muswellbrook.
The Loxford data centre scoping report notes that data centres are needed to underpin Australia's growing reliance on cloud computing, artificial intelligence, and digital services, with demand accelerating significantly as businesses and government agencies continue to transition workloads to cloud-based platforms.
"The proposal comprises a large-scale data centre facility designed to support the receipt, storage, processing, and distribution of data for a broad range of customers, including cloud service providers, digital content platforms, government entities, and large corporate organisations," the report says.
The project would use dry air chiller technology for data hall cooling, which eliminates the water consumption associated with conventional evaporative cooling systems.
Dry air chillers are a refrigeration-based technology that reject heat directly to the ambient outdoor air, without the use of water as a cooling medium.
"Unlike evaporative cooling towers, which consume significant volumes of water to dissipate heat through evaporation, dry air chillers use air-cooled condenser coils and fans to expel heat from the refrigerant circuit to the surrounding atmosphere," the scoping report says.
"This makes dry air chillers a considerably more water-efficient cooling solution, eliminating the ongoing water consumption and chemical treatment requirements associated with evaporative cooling systems."
Australian Bureau of Statistics figures show investment in data centres almost doubled in the first three months of 2026.
The result pushed business investment growth to 6.5 per cent over the three months to March, the fastest quarterly rate recorded since the peak of the mining boom in 2012.
This week's state budget said growing private sector investment in data centres and renewable energy projects were responsible for significant growth in the economy, offsetting a decline in household consumption due to the impact of higher interest rates on families with mortgages.
"Powering up with renewable energy is not merely an environmental cause," NSW Treasurer Daniel Mookhey said.
"It is an economic strategy."
But a new Climate Council report warns that the massive growth in Australian data centres could cripple the energy grid and cause power prices to increase by 26 per cent if it is not managed sustainably.
