Transgrid’s network in western Sydney will be largely full by 2033 thanks to the huge influx of data centres, the grid operator has told connection applicants.
The 330 kilovolt network in the area is already nearly full after the network signed contracts to connect 1.5 gigawatts of new data centres.
The “unprecedented increase” in enquiries around large-scale electricity loads in Western Sydney is a major change from historical, predictable demand patterns, Transgrid said in a letter in mid-June.
“Data centre demand is now at significant scale and pace, with enquiries concentrated towards Western Sydney,” it said.
“More than 8 GW of prospective data centre load is currently in advanced discussions with Transgrid regarding potential connection to the transmission network. To put that into perspective, the average daily demand for electricity in New South Wales (NSW) typically ranges between 7.5 GW and 10 GW.”
And while that 1.5 GW can be accommodated within the current network, future connections are likely to be constrained.
The news of Transgrid’s capacity difficulties was revealed by Infraseek on LinkedIn this week, in a post that noted that the significance reaches well past western Sydney.
“The NEM’s open access framework for connections was devised in an era of large central generation and the connection of smaller, more consistent loads,” the post says.
“Current NEM Rules provide little philosophy on how a finite amount of capacity should be shared once gigawatt-scale loads begin arriving together.
“The data centre development sector, progressing projects at both transmission and distribution levels, has no independent view of how much network capacity remains or how it is being allocated.
“The logjam of loads building up around Sydney is reminiscent of the pile-up of generation in north-west Victoria a few years ago, the so-called ‘Rhombus of Regret’. Will we see a ‘Polygon of Pain’ emerge in Western Sydney as data centre development runs ahead of network capacity?”
Infraseek says networks in other countries are already struggling with the issue, with the likes of PJM, the biggest grid operator in the US, and Texas’ ERCOT, as well as others in Finland, the UK and Ireland now putting structures in place to manage demand.
“[They are] all moving to manage oversubscribed connection queues and tighten fault ride-through rules for large loads, ranging from Ireland’s multi-year moratorium on new Dublin data centres to Great Britain’s readiness-based queue reform and ERCOT’s new ‘Batch’ studies,” the post said.
Transgrid says data centres may be able to join the constrained western Sydney grid, but will need to pay upfront for network augmentations if they want to connect, because there is “limited scope” to accommodate them now.Â
“Transmission network augmentations need to be funded upfront by prospective data centre proponents that either trigger the need or are expected to benefit from the additional capacity, regardless of whether they are seeking to connect to Transgrid’s network or a distribution network,” the grid operator said in its letter.
“We note that application of this principle to proponents connecting at the distribution level is subject to anticipated regulatory change.”
