Network wars: Ausgrid demands lower transmissions fees as data centres gatecrash the grid

The NSW-based Ausgrid is demanding an “imminent reduction” in network charges for all of its New South Wales (NSW) customers, after transmission company Transgrid’s recent humble-brag-warning that data centre connections are maxing out part of its grid.

In June, Transgrid said its Western Sydney network is almost full after it cleared 1.5 gigawatts (GW) of data centres to connect, and said it’s “in advanced discussions” over another 8 GW of prospective load.

The general rule of them is that network costs are fixed and divided by the number of customers. Given the boost in data centres, Ausgrid, which runs the poles and wires that take electricity from transmission lines to homes and businesses, wants to see the benefits of that improved network use now. 

“Our understanding is that these connections are utilising existing capacity and do not require upgrades to the shared transmission network, meaning that they are helping to improve NSW transmission network utilisation,” said Ausgrid executive Mark Ragusa in a letter seen by Renew Economy.

“In this case, Ausgrid expects these connections to lead to an imminent reduction in Transmission Use of System (TUOS) charges for all existing NSW customers.”

Transmission companies saw the benefits of data centre demand early, from more usage of network assets and from the likelihood they will need to build more infrastructure to cater to rising demand. 

Transgrid’s June letter said its existing Western Sydney network will be maxed out by 2033 from the data centre load, and new connections may need to figure out their own grid augmentation.

Talk to us, Ausgrid demands

The race to connect data centres is creating tension between transmission and distribution companies.

Ausgrid is concerned about Transgrid cannibalising grid capacity that it has contracted but isn’t using, and has asked – in no uncertain terms – to be included in large connection planning in future.

“Distribution networks are no longer transmission customers, but peers to be proactively consulted regarding the impact of a large load connections [sic],” Ragusa wrote, highlighting the word ‘customers’ in the letter. 

He said while transmission companies don’t legally have to consult with distributors on network capacity, although the reverse is true for distributors, not doing so “can result in missed opportunities” to figuring out better network usage in the face of huge demand.

It also wants to know exactly how the transmission company came to its conclusions on network availability in June.

“Specifically, we would like to understand how Transgrid’s analysis and forecasts factor in Ausgrid’s authorised demand, as agreed in our Connection Agreement with Transgrid,” Ragusa wrote. 

“We note that, at certain locations across the Sydney basin, Ausgrid is only using a fraction of this authorised demand. 

“Our expectation is that Transgrid, in managing the 8 GW of prospective data centre load in its connections pipeline, has reserved the full amount of capacity needed to meet our authorised demand for the exclusive use of Ausgrid customers.”

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