Data centre builder Firmus says diesel generators only for emergencies

AI infrastructure company Firmus says it would only use diesel generators during emergencies, despite appealing a Tasmanian council planning condition that only allows for emergency use.

The company today fronted a parliamentary inquiry into AI data centres.

The inquiry will continue hearings before making recommendations to the state government.

AI data centre builder Firmus Technologies has told a parliamentary inquiry it would only use diesel generators at its sites during emergencies.

Firmus has operational AI data centres in Melbourne and Singapore, and is planning more in Tasmania, South Australia, Indonesia and Malaysia.

AI companies rely on energy-intensive data centres to train large language models and process and respond to queries from AI chatbots such as ChatGPT and Claude.

Firmus is building an AI data centre in the Launceston suburb of St Leonards, has approval for another at Long Reach in northern Tasmania, and is seeking approval for a third at Wesley Vale in the north-west.

When Firmus gained planning approval for its Long Reach facility, George Town Council imposed a condition that the backup diesel generators could only be used during emergencies, maintenance and testing.

Community concerns had been raised about the environmental and noise impacts of their use.

Firmus appealed the condition, calling it "unreasonable" and stating it would prevent it from using generators during periods of "energy market stress".

Tasmania's Environment Protection Authority has since sought to join the appeal, stating in its submission that it would have assessed the proposal differently had it known the generators would be used "potentially whenever it is commercially convenient for the operator".

On Tuesday, Firmus faced a parliamentary inquiry into AI data centres in Tasmania and concerns over diesel generator use were raised.

Independent MP George Razay asked Firmus how often it would use its diesel generators.

"Our intent with regards to diesel generators is they're backup generation," Firmus energy manager Paul Grzinic responded.

"They are not intended — as others have claimed — for us to run these when commercially convenient, or any other means other than in an emergency situation."

Greens MP and acting inquiry chair Tabatha Badger pressed the issue.

"So you can understand for Tasmanians listening, that's not going to add up and make a whole lot of sense."

Mr Grzinic said he could not speak in detail about the appeal while it was ongoing.

"We're just seeking, effectively, clarification of — it's quite broad, that definition of emergency — so we're just seeking clarification," he said.

Firmus is setting up a research and development facility at its Wesley Vale site to investigate ways to reduce reliance on backup diesel generators.

Asked by Ms Badger who Firmus's customers were, co-chief executive and co-founder Tim Rosenfield declined to say.

"That can be for security reasons or contractual confidentiality reasons, so I wouldn't expect it to be an expectation for us to do so — it's just not an industry norm.

"And I don't think it's something our customers would be particularly happy with us doing."

The company has previously said it has contracted the Launceston and Wesley Vale facilities to customers, while Long Reach was under option to a customer.

Last month, Firmus was forced to withdraw its highly-anticipated initial public offering (IPO) — set to be the biggest float in the Australian share market since Telstra in 1997 — after lacklustre interest from investors.

Mr Razay asked about the impact that had on Firmus's plans, but Mr Rosenfield said it did not change anything.

"We have extremely supportive shareholders who are backing us to grow exactly the same way we've always planned to grow," Mr Rosenfield said.

The inquiry will continue hearings with stakeholders about AI data centres in Tasmania before making recommendations to the government.