The number of data centres being proposed and built in NSW is growing quickly, with the possibility of even faster future growth. This poses new and unique risks to both our communities and the grid. We need a robust new framework to manage and avoid these risks, while ensuring the rollout of data centres provides strong actual benefits to energy consumers and the community.
That’s why our response to the NSW Department of Climate Change, Energy, the Environment and Water’s (DCCEEW) consultation paper on Reforming electricity network connection and cost recovery arrangements for data centres in NSW strongly supports the proposal to implement a bespoke access framework for data centres in NSW. We support the comprehensive approach and make several detailed recommendations to ensure it delivers on the intent, including:
- That data centres pay their way to cover additional demands on the energy system as the minimum requirement and first priority, in protecting the community;
- that the impacts of data centres should be considered holistically and Government should refuse data centre proposals if they pose unique and material risks to NSW consumers, community or environment;
- that there are measures to ensure maximum positive value is returned to NSW energy consumers and community from the connection of new data centres, and;
- recognising that NSP and consumer interests aren’t always aligned, but the consumer interest should be paramount – so frameworks should not rely on NSP ‘self-interest’ to protect consumers.
What’s next?
DCCEEW will use submissions to inform new regulations intended to be made under the Electricity Infrastructure Investment Act 2026, subject to the Electricity Infrastructure Investment Amendment Bill 2026 being passed. These reforms are designed to address cost recovery issues that are also being examined by the Australian Energy Market Commission (AEMC), through two rule change requests submitted by the Federal Government. We will continue to engage in these processes at a state and federal level, to ensure consumer interests are prioritised by decision makers.
