This week was all about data centres and system security. The 2025 Transition Plan for System Security from the Australian Energy Market Operator issued a warning on shortfalls in investment, as the market decouples from a reliance on coal generators for system security.

Ten coal-fired power stations have closed since 2012. Half of the remaining fleet — as well as several large gas generators — are projected to retire in the coming 10 years.

AEMO predicted inertia-deficits across NSW from 2027-28 based on the current Eraring retirement date. Victoria was also warned to step-up ahead of the closure of Yallourn. Meanwhile South Australia, which is further down the path to transition, was not flagged with any ‘red lights’ in the new traffic-light-coded report.

But even as security concerns were outlined in the TPSS, the strain on the NEM from data centres might be overstated. That’s according to a new analysis from Oxford Economics Australia, which says that six in every seven megawatts of connection requests could end up being ‘phantom demand’. That’s because it is based on connection requests, not finished projects.

But demand from data centres is nonetheless predicted to grow. A report this week from Moody’s found that continued development of data centres is expected to drive demand in the longer term. Signs are already clear: this week OpenAI agreed to move into a $7 billion data centre being built by NextDC in Western Sydney.

Meanwhile, the price of electricity is expected to rise if the transition to renewables is bungled. Delays to wind and transmission projects, along with prolonging the life of existing coal-fired power plants, could add 25% to annual household electricity prices, according to new analysis from the Australian Energy Market Commission.

In its Residential Electricity Price Trends 2025 report, the rule-maker added its voice to calls from industry for faster planning and approvals for renewable energy projects.

Capital

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Capital news this week was all about virtual power plants. The National Reconstruction Fund Corporation allocated $100 million to Intellihub, a smart-metering and data-intelligence business. The corporation said it was particularly interested in Intellihub’s proprietary VPP technology.

Meanwhile, a Western Australian start-up will go nationwide with discounted loans for rooftop-solar, home-batteries and access to VPP technology under a $35 million deal with the Clean Energy Finance Corporation. Starling Energy Group, through its retail brand Plico, is tipped to help households save around $1,100 on energy bills each year.

In other capital news, the Queensland Government will construct the state’s first gas-fired power station in more than a decade. State-owned CS Energy and APA Group will construct the 400MW Brigalow Peaking Power Plant in Western Downs.

Projects

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In project news, Zenith Energy has signed a 25-year power-purchase agreement with Northern Star’s Kalgoorlie Consolidated Gold Mine in Kalgoorlie, Western Australia. Zenith will fund, build, own and operate 256MW of wind generation, 138MW of battery energy storage and 138MW of solar generation using 5B’s rapid-install Maverick system.

Still in WA, Fortescue installed its first-ever large-scale Battery Energy Storage System at North Star Junction. The 48 units will be powered by Chinese BYD technology.

Regulation

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On the regulatory side, there was an increase in the average amount of energy debt for consumers. A smaller number of customers racked up bigger debts, meaning the average jumped to $1,367 from $1,148 a year earlier.

Meanwhile the Australian Energy Market Commission has clarified the rules for synchronous condenser connections. Tweaking existing categories for integrated resource providers and customer registration was “the simplest feasible approach”, they said.

Policy

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In policy news, Victoria’s Auditor-General said the state was “almost certain” to have a disorderly energy transition. This would result in job losses, supply disruptions and price volatility for households and businesses. The Auditor-General found that Victoria is likely to meet its 2030 storage target, but would not meet its 2032 offshore wind target because auctions and key transmission projects have been delayed.

Research

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In research news, Monash University launched a new research-hub which has the aim of making steel production greener and more sustainable. The ARC Research Hub for Smart Process Design and Control brings together researchers from several Australian universities, alongside industry partners Rio Tinto, Baowu Steel and China Steel Corporation, to develop smarter, low-emission steelmaking processes.

Meanwhile Chinese researchers tested an electrolyte for lithium-metal batteries that can prevent fires. The electrolyte utilises a chemical which turns from liquid to solid at high temperatures shutting down a run-away short-circuit within seconds.

And mining waste from the production of lithium could replace part of the cement used in the making of concrete, according to UK researchers. The lithium mining spoil is rich in similar minerals to Portland cement, meaning its use could slash emissions and reduce landfill.

Technology

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In technology news, Transgrid said it had successfully installed two new circuit breakers on 132-kilovolt transmission lines at Gunnedah. The new circuit breakers don't use SF6, which is commonly used in electrical switchgear, but is a greenhouse gas that is more potent than carbon dioxide.

Looking ahead to next week, the market operator will release its updated Integrated System Plan. We are expecting a pricing review report from the Australian Energy Market Commission. And The Energy will hold its first in-person events in Sydney and Melbourne. Check out theenergy.co to see if tickets are still available.