Data centres operating in Australia’s electricity grid should bring their own clean, firmed energy, operate flexibly, and connect efficiently in a suite of reforms recommended to state energy ministers by the Australian Energy Market Commission (AEMC).
AEMC executive chair Anna Collyer said the advice reflected the balance the AEMC has to strike as data centre investment accelerates.
“Data centre growth does not have to come at a cost to other consumers, but that depends on getting the settings right from the start. Our starting point is simple, this growth must not leave other consumers worse off,” she said.
Related article: Bowen takes on Liberal states over data centre rules
The AEMC’s advice recommends four changes to work together:
- Bring clean energy: data centres would surrender Renewable Electricity Guarantee of Origin (REGO) certificates from new, additional generators to offset the power they use.
- Prove they’re covered: data centres would need to show their demand is backed by new firm capacity, so their connection doesn’t tip the supply-demand balance and push up wholesale prices for everyone else.
- Register and play by market rules: data centres would become registered market participants.
- Be flexible: connection agreements would encourage data centres to shift demand and co-locate with generation, easing pressure on the network.
The AEMC has advised these reforms could be staged and applied differently depending on a data centre’s size and load impact, so smaller facilities aren’t subject to the same requirements as the largest connections.
To manage the gap between a data centre’s connection and new renewable generation coming online, the advice identified options for data centres to temporarily draw on existing renewables and make up any shortfall by surrendering additional certificates in later years.
This advice sits alongside a number of other reforms already before the AEMC.
The Australian Energy Market Operator (AEMO) has lodged a rule change request to give it and networks better real-time visibility of large loads.
Federal Minister for Climate Change and Energy Chris Bowen has also lodged two related rule change requests—Cost recovery for network augmentations Package 1 and Package 2—to close gaps in how data centres pay for the network upgrades their connections trigger.
The AEMC is also progressing a rule change to update technical access standards for large inverter-based loads like data centres. A draft determination was published in March, and a final determination is due in late October.
Together, these reforms are aimed at ensuring that the businesses building large loads bear the costs and risks they create instead of the households and small businesses connected to the same grid.
The AEMC has advised that further design work is needed, and Commonwealth, state and territory governments will determine how the package is implemented through legislation, new electricity rules, or both.
The Commission will run its own public consultation on the rule changes within its remit, working with stakeholders including data centres, other customer groups, industry, and the Commonwealth, state and territory governments, before anything is finalised.
Related article: Aussies want data centres to fund their own clean energy
Collyer said the AEMC’s approach was informed by experience overseas.
“The lesson from other jurisdictions isn’t that data centres are the problem, it’s that very large loads need to be planned, connected and operated as part of an integrated system. That’s exactly what this advice is designed to do,” she said.
