The Australian Energy Market Commission (AEMC) is seeking stakeholder feedback on a draft rule proposing new technical standards for large data centres and similar facilities connecting to the National Electricity Market.
Most data centres use inverter-based technology, similar to that used in many wind, solar and battery projects. When the grid experiences a credible disturbance such as a voltage dip, these facilities can suddenly disconnect simultaneously, increasing the risk of cascading outages or instability.
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The AEMC is proposing three key changes in its draft rule:
- A clearer framework for defining and classifying large inverter-based loads (including data centres), which would determine when and to whom the technical connections standards apply, particularly for those parties connecting to the distribution network.
The draft rule would raise the current threshold for large inverter-based loads from 5MW to 30MW and embed this definition directly in the National Electricity Rules (NER), so stricter technical requirements apply only to those most likely to affect power system security. - Data centres would need to meet specific disturbance ride-through requirements, staying connected during certain voltage and frequency disturbances and recovering power within defined timeframes. These standards are based on actual plant capabilities and grid needs.
- Alignment with global practice. By largely matching the standards proposed or used in Texas, Ireland, and Finland, data centre operators could use the same equipment and feasibility studies as they do elsewhere. This standardised approach would mean faster deployment, lower costs, and better investment certainty.
AEMC chair Anna Collyer says clear grid standards are essential to supporting Australia’s data centre growth without compromising system security.
“Data centres aren’t passive loads anymore; they’re active grid participants. When they fail to ride through faults, it has the potential to trigger cascading failures and blackouts,” Collyer said.
“We have seen this happen overseas, and it can cost consumers billions in lost electricity supply or emergency network upgrades.
“These proposed standards would help prevent that. They are designed to enable investment with certainty, not block it. Data centre operators would know exactly what’s required upfront. Network service providers would be able to apply technical connection standards consistently.”
Key draft recommendations include:
- Large data centres: Connecting to the grid would need to meet new ride-through standards to stay connected during faults
- Clear threshold: For data centres connecting to distribution networks, the draft rule defines ‘large’ inverter-based loads as 30MW or greater (up from 5MW), so technical requirements apply proportionately based on actual grid risk
- International alignment: Standards would largely match those in use or proposed in Texas, Ireland, and Finland, reducing equipment costs and engineering complexity
- Better visibility: Network service providers and AEMO would have clearer data on how data centres respond to grid disturbances, enabling more efficient system management
- Compliance focus: Connection agreements would require terms ensuring non-registered data centres stay compliant with performance standards (registered facilities already need to comply with strict compliance requirements under the NER).
Related article: Amazon to invest $20B in Australian data centres
The AEMC is seeking stakeholder feedback on the draft rule and determination by 7 May 2026. A final rule is expected by mid-2026.
