Last week, members of the Sequana Group team joined industry leaders at the Melbourne Cloud & Datacentre Convention 2026 to explore one of the sector’s most pressing challenges: how to scale AI and digital infrastructure sustainably in a water-constrained future.
A standout theme across the event – particularly in the panel on AI, Data Centres & the Water Crisis – was the growing tension between rapid data centre growth and water security, especially here in Victoria.
The key takeaway is that Victoria is firmly positioning itself as a leading APAC hub for data centres and AI infrastructure, with strong government backing and a clear trajectory for growth.
At the same time, water is emerging as a critical constraint and opportunity. Water authorities are increasingly viewing data centres not just as demand pressures, but as partners in innovation, with a focus on alternative water sources, reuse systems and shared infrastructure investment.
We’re also seeing clearer policy direction. Recent guidance from the Victorian Government sets expectations for:
• early and ongoing engagement with communities, water authorities and Traditional Owners
• minimising potable water use in favour of circular and non-potable sources
• adopting efficient and emerging cooling technologies
• contributing to enabling infrastructure
• building resilience to climate variability
• greater transparency in water usage and performance
On the ground, the scale of growth is significant. Proposed developments in 2025 alone equate to an additional ~3000L/s of water demand – at a time when Melbourne’s water storage is at its lowest level in six years. With increased reliance on desalination and the risk of restrictions returning, a long-term water strategy is now central to data centre planning.
Encouragingly, industry benchmarks are emerging. Facilities like NEXTDC’s M1 – Australia’s first NABERS 5-star rated data centre – are setting the pace for what “best practice” looks like across energy efficiency and integrated sustainability.
What this means for our industry: Delivering the next generation of digital infrastructure will require deeper collaboration across developers, engineers, government and utilities, balancing performance, sustainability and social licence in equal measure.
At the Sequana Group, we’re excited to be part of this conversation and to help shape infrastructure solutions that are not only future-ready but resource-responsible.
