Transgrid is seeking a rule change to charge data centres for reserved grid capacity, tackling the growing problem of 'phantom load' from hyperscale developments. The NSW network owner is working with the state government on a mechanism to recover costs based on booked capacity, regardless of actual use. This move directly confronts the immense grid pressure from the technology sector. It comes as NEM spot prices fell 51.3 per cent week-on-week to average $54.09/MWh, a sharp drop masking the underlying challenge of planning for unprecedented, lumpy demand.
The scale of this new demand is staggering. In the Northern Territory, Energy North has submitted federal environmental plans for Project Ares. The proposal includes a hyperscale data centre powered by a 3 GW solar array, a massive 16 GWh battery, and a 1,038 MW gas-fired power plant. Separately, Australian AI developer Firmus Technologies locked in a 12-year energy supply agreement with Gunvor Group. The deal includes 1.5 GWh of battery storage to be delivered by 2032, explicitly linking AI infrastructure growth to large-scale energy procurement.
Major supply-side projects are advancing to meet this demand. Orica has reached a final investment decision on its Hunter Valley Hydrogen Hub, a milestone for the federal government's Hydrogen Headstart programme. The 18 MW project, backed by $432 million in funding, will use green hydrogen to displace natural gas at its Kooragang Island ammonia plant. In South Australia, the 150 MW / 300 MWh Bungama BESS has begun full commercial operations. Its arrival is timely, following a seven-year low in local wind generation that underscored the state's need for dispatchable firming capacity.
At the consumer level, market redesign is accelerating to harness distributed resources. The Clean Energy Regulator confirmed that 2025 was a record-breaking year for home battery installations, marking the first anniversary of the federal Cheaper Home Batteries program. This surge in consumer storage provides the backdrop for new retail offerings like First Energy's Solar Sharer plan. Launched yesterday, the NSW offer provides free electricity between 11am and 2pm. It aims to incentivise households to shift consumption into the midday solar peak, effectively using consumer behaviour as a grid management tool.
This dynamic of soaring demand and innovative supply response is playing out globally. Private equity giant KKR is acquiring EDF’s North American renewable operations for $4.2 billion, its largest single clean energy investment. Meanwhile, Neoen secured a 20-year capacity contract for a 1,600 MWh battery in Ontario, Canada. These international capital flows and project developments confirm that Australia's challenges in integrating data centres and renewables are shared across advanced economies. Locally, the focus now turns to regulatory evolution, with submissions closing this month for AusNet's bushfire cost recovery application.