Submission on NSW data centre reforms
These recommendations to the NSW Department of Climate Change, the Environment, Energy and Water cover proposed reforms to electricity network connection and costs recovery arrangements for data centres.
As data centre industry development accelerates, there is a need for regulatory reforms that support potential economic and technological benefits while ensuring there are not adverse outcomes for the energy grid.
Given the projected mismatch in energy demand and available energy infrastructure, there is a need for further reform of electricity network connection arrangements for data centres. This is reinforced by forecasting that NSW will miss its legislated Energy Security Target from 2033-34. Additional reform in cost recovery arrangements is also warranted, and has the potential to build social licence within the community.
ATSE provides the following recommendations on the proposed reforms:
Recommendation 1: Ensure connection agreement flexibility obligations are tailored to the workload characteristics of each data centre.
Recommendation 2: Periodically review and adjust the Major Network Upgrade Fee to maintain alignment with the marginal network augmentation costs attributable to data centres.
Recommendation 3: Apply forfeiture of the entry bond if steps toward construction do not commence within two years.
