The Australian Energy Market Commission (AEMC) has proposed new technical standards for large-scale data centres, aiming to bolster grid stability as the country’s digital infrastructure boom accelerates.
The draft rule responds to growing concerns that the rapid expansion of energy-intensive facilities, driven by artificial intelligence and cloud computing, could inadvertently trigger cascading outages if left unregulated.
Most modern data centres rely on inverter-based technology, similar to that used in solar farms and battery storage. However, evidence from abroad suggests these systems can be volatile.
In July 2024, a single fault in Virginia, US, saw 60 data centres simultaneously pull 1,500 megawatts from the grid, causing widespread instability. Similar incidents in Ireland and Texas have even led some regions to pause new connections entirely.
AEMC Chair Anna Collyer warned that data centres can no longer be viewed as passive loads.
“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.
Under the new proposals, the threshold for what constitutes a large inverter-based load will rise from 5 MW to 30 MW. This ensures that stricter technical requirements are applied proportionately to the facilities most likely to impact power system security.
Secondly, data centres must remain connected during voltage or frequency disturbances rather than abruptly disconnecting. These standards are based on actual plant capabilities and grid needs.
To lower costs and speed up deployment, the AEMC aims to match standards used in Finland, Ireland, and Texas, allowing operators to use standardised equipment and engineering studies.
Network service providers and the Australian Energy Market Operator (AEMO) will receive clearer data on how these facilities respond to grid stress.
The proposed standards would help prevent billions lost in during electricity disturbances 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, and network service providers would be able to apply technical connection standards consistently,” Collyer said.
Stakeholders have until May 7 to provide feedback on the draft, with a final determination by mid-2026. AEMO will publish interim guidelines in the coming months to assist the industry during the transition.
