New grid standards for data centres


Hey Reader, in today's edition:

  • New data centre grid standards mooted
  • Victorian Default Offer lands
  • Three oil crisis scenarios

New grid access standards on the cards for data centres

Under a proposed rule change responding to the unprecedented growth in data centres connecting to the grid, large inverter-based loads would be forced to adhere to new grid-access standards.

The Australian Energy Market Commission has gone further than outlined in an initial consultation paper ahead of its draft rule, which was triggered by the Australian Energy Market Operator.

The market operator sought to allow network owners to request information on ride-through capability from large loads. The proposed changes would enable this, but also require data centres of 30MW or greater to ride through certain frequency or voltage disturbances in order to prevent cascading failures and potential blackouts. The standards would not be applied retrospectively, but instead to those who have not yet received an offer to connect.

Feedback on the draft rule change is due by May 7.

Victorian Default Offer shrinks

Relief might be on its way for the approximately 190,000 Victorians whose electricity costs are set by the Victorian Default Offer, with the average offer proposed to drop by 3% for households and 5% for small businesses. Lower environmental costs are the primary reason for the proposed decrease.

“The commission has made this draft decision with the best available data and with consideration for long-term interests of Victorian consumers with respect to price, quality and reliability of essential services.”
Gerard Brody
Essential Services Commission Chairperson

The Victorian announcement comes a week ahead of the release of the Default Market Offer and amid reform of the DMO by the federal government that will see the reference price brought more in line with that of Victoria’s, along with wrapping in the controversial Solar Sharer Offer announced by the government in November and due to come into effect in July.

The electricity code was updated on March 5 to include the Solar Sharer Offer, clarifying that electricity retailers must make an SSO standing offer generally available to residential customers who have a smart meter, and explain the circumstances in which the tariff may or may not be of benefit to the customer.

Expert view

“This is only the draft decision by the Essential Services Commission however it is being released in a time where there is significant uncertainty in forecasting energy costs including potential uncertainty in future wholesale costs due to the Iran war.

It is also before the final pricing decisions for the five Victorian electricity distribution networks due in April, so in my view, whatever is in the draft will probably change relative to the final.

I also note that unlike previous years the VDO and the DMO have generally been released on the same day and this is not the case this year and there is the proposed announcement for the Solar Sharer in the pipeline.”

Gavin Dufty
National Director Energy Policy and Research, St Vincent de Paul Society Australia

Jarden analysts work up three scenarios for oil crisis length

Analysts from NZ-based investment bank Jarden have labelled the initial reaction by oil traders to Iran’s blocking of the Strait of Hormuz as “muted” to date, because they thought the Iran missile crisis would be resolved quickly. In a note on March 6, the analysts modelled three scenarios for how likely the conflict will play out. They believe that “energy markets are sleepwalking” and are urging people to be more focused on how oil traffic through the Strait is being affected, because it handles a fifth of global seaborne oil trade.

Under their most likely “Persistent Friction” scenario, the analysts believe a 6-8 week conflict with Iran is most likely. This will see the price of Brent Crude oil average US$90 a barrel in 2026.

Under their worst case scenario of a “Prolonged Shock” of over two months of conflict forcing the Strait of Hormuz to be fully controlled by Iran, Brent Crude prices would skyrocket to US$150 a barrel for most of the year. Jarden have not since updated their scenarios and said they remained current.

“While these represent only a fraction of possible outcomes, they highlight the extreme sensitivity of cash flows and valuations to the duration of the Strait closure. The most affected Australian oil and gas stocks are Woodside, Santos, Beach Energy and Karoon Gas.”
Nik Burns
Head of Energy Research, Jarden

In the midst of these uncertain times, the Australian Department of Climate Change, Energy, the Environment and Water is consulting on its Gas Market Review including a domestic gas reservation scheme, with submissions due this Friday.

Catch Up

Capital

Investment in Australian and New Zealand renewable infrastructure has surged 52% year-on-year but the region nonetheless ranks last in the world in terms of near-term growth confidence, procurement platform Ansarada notes. Just 7% of executives surveyed for its 2026 Renewable Energy Infrastructure Outlook Report said they see ANZ as a top region for increased renewable activity in the next two years. Renewable Energy Zone (REZ) models “are fundamentally changing how risk is allocated” by capping zone capacity and centralising transmission, managing director Justin Smith said, noting that supply chain pressures – orders for large-scale equipment like turbines face lead times of up to 36 months – “are compounding challenges” despite Australia being seen as “a key testbed” for methods of building renewables-powered AI data centres.

The Western Australian government has opened another round of its Innovation Booster Grants, which offer up to $50,000 for businesses developing solutions aligned with WA’s nine priority sectors, of which energy is one. The program includes help to develop or refine products and services; test, validate or certify a minimum viable product; secure expert consultancy in areas like IP, marketing and commercialisation; and solve complex technical challenges that require external specialist support. Applications close March 30. (WA Government)

Solar may be continuing its explosive growth in China but it’s moving the other way in the United States, which added just 43.2GW of new solar generation capacity last year. That’s a 14% decrease from 2024, compounded by a nearly 40% fourth-quarter decline in utility-scale projects as developers delayed energisation due to changes in tax credit deadlines. And despite 2025 being “a monumental year” for US solar manufacturing – module manufacturing grew by more than 50% – “the actual production of these facilities remains considerably below domestic demand,” the Solar Energy Industries Association (SEIA) said in releasing its latest Solar Market Insight Report. Nonetheless, cumulative solar capacity is expected to triple by 2036.


Projects

SA’s SunPork piggery will welcome Australia’s first commercial-scale agricultural renewable gas facility. LMS Energy subsidiary Helmont Energy said the Wasleys RNG Facility will use anaerobic digestion methods to capture biogas providing 40TJ of RNG that will be supplied to gas users across the state.

Octopus Australia has officially broken ground on its $900 million Blind Creek Solar Farm and Battery project, a 300MW solar farm and 243MW/486MWh battery in Bungendore, NSW. The project, which will connect into the grid between Sydney and Canberra, will provide firming capacity that NSW premier Chris Minns, who attended to lift a shovel, called “the kind of project NSW needs as we replace ageing energy infrastructure.”

Renewables firm TagEnergy is trying a new approach to building social capital for its project, partnering with community housing provider BlueCHP to deliver at least 100 affordable housing beds on the site of The Pines Wind Farm in NSW, which is planned for financial close in late 2028. The one and two-bedroom homes will house workers during the project’s construction before being opened for public use. The project aligns with the housing strategy of local Oberon Council.

Emerging community based energy programs must engage with community stakeholders early on and through the life of the project, the Community Power Agency has said in releasing an extensive guide incorporating 18 months of research and 23 case studies. The guide explores a range of models for community renewables projects and is being positioned to help Australia’s communities normalise the process.


Regulation

The International Energy Agency has announced the release of an extra 400 million barrels from emergency oil reserves, its largest-ever release, in an attempt to contain a price spike driven by the war in the Middle East. In Australia, surging retail petrol prices have led the government to direct the ACCC to crack down on market abuses by petrol retailers. The government has doubled potential penalties for false or misleading conduct and cartel behaviour – to $100 million per offence – with treasurer Jim Chalmers pointing out that at this point in the war, “We are not experiencing a fuel shortage, but rather localised disruption due to significant spikes in demand.”

The Australian Energy Regulator (AER) is canvassing stakeholders’ views on a waiver application by VIOTAS, which wants to participate in the Wholesale Demand Response Mechanism of loads with multiple, electrically interconnected connection points. VIOTAS has requested the waver through the government’s Regulatory Sandboxing framework. Submissions are open until April 10.

Overlapping mandates between the AEMO, AEMC and AER mean regulators should recast energy industry decision-making structures by “clearly delineating responsibilities and decision rights,” Nexa Advisory has recommended in its submission to the Review of AEMO’s governance arrangements. This includes refreshing the Statement of Expectations for AEMO “with measurable outcomes and consistent annual public reporting”, as well as lifting budget transparency from top-line reporting to program-level transparency.


Policy

AGL CEO Damien Nicks addressed a room of gentailers and regulators at an Australian Energy Council roundtable in Melbourne this week, telling them “we need to remember that consumers own their ‘consumer energy resources’, and we should be enacting policy and regulation that provides them with value to make the most of their resources: not unnecessarily impede their ability to use them”. He said consumer energy resources (CER) including home batteries needed to be harnessed more effectively, and for that, consumers needed better pricing and the ability to opt in or out of Virtual Power Plants (VPPs). In the speech, Nicks also called for simple, actionable, fair network tariffs that can be integrated into retail offers so customers can understand and respond to them, and nationally consistent technical standards that ensure all CER is safe and reliable, while supporting customer trust and empowering choice.

Faced with a 460% surge in “speculative grid connection” applications during the first half of 2025 – overloading the queue for demand connections so much that some projects are waiting up to 15 years for a connection – the UK government is moving to push back by prioritising projects that are “ready and needed to deliver growth”. These include industrial sites and the estimated 140 AI data centres currently in the queue. The surge – which came months after regulators moved to prioritise grid connections for businesses that will deliver clean energy – offers a cautionary tale for Australia as regulators wrestle with the best policy to manage data centres’ exploding demand for energy.

United Nations secretary-general António Guterres has called out the importance of renewables as a solution to a heavily concentrated fossil fuel economy in which “every conflict risks sending shockwaves through the global economy.” Renewables, he said, have provided an “exit ramp” from “dependence on volatility” and “cannot be blockaded or weaponised.”


Technology

Five companies – Allegro Energy, BroadBit Batteries, e-Zinc, Isothermix and Knode – have been chosen as ‘champions’ for the first challenge of WA’s GreenTech Hub’s innovation challenge, with early-stage WA tech firm CO2 Onboard earning honourable mention. The challenge – the first of seven such GreenTech Hub competitions – saw 31 submissions from Australia, Asia, Europe, and North America competing for honours.


Research

CSIRO researchers have claimed success in trials of a significant new technique for using agricultural waste to decarbonise iron and steelmaking, working with colleagues at the Indian Institute of Science and commercial partner RESCONS Solutions Pvt to trial a new process that uses biomass-derived syngas for iron ore reduction. The team successfully blended 5% and 10% rice husk pellets into Jindal Steel gasifiers, achieving sustained syngas production with no loss of performance in a process that could reduce steel sector emissions by up to half.

Battery recyclers often overlook the critical pretreatment stage of the lithium-ion battery recycling process but could improve recovery efficiency and environmental outcomes by optimising the stage, Monash University researchers have found in a paper published in Nature. The study compared three approaches – mechanical, thermal and chemical pre-treatment – and found clear tradeoffs that affect how well recycling works and how much critical metal is recovered.


People

Battery optimisation and NEM trading intelligence platform tool OptiGrid has appointed Jørn Hammer as its inaugural chairman. Hammer, who has over 30 years’ experience in renewable energy investment and business strategy, previously served as a partner and head of Copenhagen Infrastructure Partners (CIP) Australia, worked at Vestas, and served on the board of the Clean Energy Council for a decade.

FTI Consulting has appointed Business Transformation practice member Carrie Grimes as senior managing director. With over 20 years’ experience in mining, oil and gas, utilities and infrastructure, Grimes specialises in operating model transformation and operational improvement.

What's On

March 12
Renewable Heat Adoption Challenge

Greenhouse is hosting presentations and 'matchmaking' for energy end users, solution providers and consultants who are focussed on decarbonising industrial heat. Speakers include Emma Peacock from the Australian Industrial Renewable Heat Accelerator, Cathy Inglis from Think Brick, Rick Umback from the Australian Food and Grocery Council and Tennant Reed from Australian Industry Group.


March 17
Developing a community stake in renewable energy

The Community Power Agency (CPA) will host a webinar marking its launch of a new best-practice guide for implementing community energy partnerships. CPA’s Dr Anna Berka and Claudia Hodge will be joined by Wambal Bila’s Gavin Brown, Emma Stilts of Manilla Community Renewable Energy Inc, and Stride Renewables’ Cubby Fox.


March 17-19
Energy Networks Australia Conference

Climate Change Authority Chair Matt Kean, Iberdrola Australia CEO Paul Simshauser and Airtrunk Founder Robin Khuda will keynote this event in Adelaide also featuring the leaders of Australia's energy network companies.


March 18-19
Energy Storage Australia

Speakers at this Sydney event include NEM review chair A/Prof Tim Nelson; Modo Energy’s Wendel Hortop; SolaX Power’s Wenyan Sharp; Indigenous Energy Australia’s Michael Frango, Hydro Tasmania’s Erin van Maanen, and the Energy Security Corporation’s Paul Peters.


March 19
Powering the future: Sustainability of mining energy transition materials

The Melbourne Energy Institute will welcome Monash University’s Dr Nikolas Kuschnig for a session exploring the sustainability of mining energy transition minerals. The one-hour session, starting at 2pm online and in person at the Melbourne Connect building in Carlton, will explore the lack of information about artisanal and small-scale mining (ASM) and the impact of uncertainty on the supply of metals critical for the energy transition.


March 24
Powering WA's Regions: Remote and Offshore Renewables

The Clean Energy Council will hold a panel session at Perth’s Golden Ballroom Centre, with speakers including Sabine Powell of DNV Australia, Vi Garrood of Horizon Power, Thomas Friberg of Zenith Energy, Emma van der Velde of GHD, and Nicole Blackburn of Schneider Electric (Australia).


March 24
Energy Dialogue Victoria

A panel of senior industry executives will discuss the future of energy transition, regulation and innovation at a Trans-Tasman Business Circle event. Speakers include Clean Energy Regulator chair David Parker AM, CBA’s Vivek Dhar, and Momentum Energy’s Lisa Chiba.

The Energy

The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.

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