The Australian Energy Market Commission (AEMC) has finalised a comprehensive overhaul of the technical requirements for connecting to the National Electricity Market (NEM).
It’s part of the first package of improvements to the national grid access standards, which focuses on making it faster and cheaper for renewable energy generators to connect to the grid.
The AEMC is also seeking stakeholder feedback on the second package, which proposes new requirements to address emerging challenges from large energy users such as data centres and hydrogen electrolysers and ensure power system security.
Both packages stem from the Australian Energy Market Operator’s (AEMO) comprehensive review of technical requirements for connection, which involved extensive stakeholder consultation.
AEMC Chair, Anna Collyer, said these reforms will help accelerate Australia’s energy transition while maintaining system security.
“This is the most significant modernisation of the NEM technical connections standards since 2018, coming at a critical time when the pace of connections needs to accelerate dramatically to meet Australia’s renewable energy targets,” Ms Collyer said.
“With renewable energy projected to triple by 2030 and utility-scale batteries to increase fivefold in the same period, these reforms will help reduce connection bottlenecks while maintaining system security.”
The finalised package one reforms will make the grid connection process more efficient by:
- Adding more prescription and clarity to technical requirements, reducing costly negotiations
- Better accommodating inverter-based resources like solar, wind and batteries
- Broadening application to synchronous condensers and high voltage direct current (HVDC) links needed for system stability
These reforms will commence on 21 August 2025, with transitional provisions to minimise disruptions to ongoing connection applications.
The commission is also seeking stakeholder feedback on package two, which seeks to address the projected growth of large-scale electricity users, particularly data centres driven by artificial intelligence (AI) development.
“The rise of AI is driving unprecedented demand for data centres in Australia, with some facilities potentially requiring as much electricity as small cities,” Ms Collyer said.
“Package two proposes new standards to ensure these facilities can respond appropriately during power system disturbances and don’t inadvertently make problems worse during system events.”
The AEMC said the potential need for reforms in this space was highlighted by a recent incident in the US where 60 data centres consuming 1500MW of power disconnected simultaneously during a system disturbance, compounding grid stability issues.
With package one now finalised and package two open for stakeholder input, the AEMC is progressing a comprehensive approach to connection standards.
The Commission invites stakeholder feedback on package two by 19 June 2025.
Find more information about package one on improving the NEM access standards here. Find more about package two and provide feedback here.
