Australia’s energy market regulator is considering mandatory registration and new operational requirements for large data centres and other major electricity users, as it seeks to improve visibility of their power consumption and manage the impact of rapid changes in demand on the national grid.
The Australian Energy Market Commission (AEMC) published a consultation paper on 12 November in response to a rule change request from the Australian Energy Market Operator (AEMO). The request identifies gaps in the National Electricity Rules (NER), which AEMO says do not currently provide it and network service providers with consistent visibility of large inverter-based loads (IBLs), or an appropriate framework for managing significant and rapid changes in their electricity demand.
IBLs include data centres, hydrogen electrolysers and other facilities driven by power electronics. Their demand can change rapidly, while data centres can also scale more quickly than traditional electricity loads because of their modular design.
AEMO forecasts data centre electricity consumption will increase from around 5TWh currently to approximately 34TWh over the next decade, lifting its share of National Electricity Market (NEM) operational demand from around 3 percent to 13 percent.
The AEMC is seeking feedback on two main areas of reform: a registration framework for large IBLs, and additional technical access standards covering communications, telemetry, remote monitoring and control, and the management of changes in active power demand.
On registration, the commission is considering adapting the existing NEM registration framework rather than creating a permanent new Registered Participant category specifically for large IBL operators. Registration could provide a mechanism for requiring data centres to supply information to AEMO, including through the Projected Assessment of System Adequacy (PASA) framework, and provide greater clarity around the application of operational directions.
The AEMC is seeking views on whether the 30MW threshold for large IBLs established in its access standards rule finalised on 12 November would be appropriate for registration, or whether a different threshold should apply. It is also considering whether requirements should cover existing facilities as well as new connections.
The consultation examines whether large IBLs should eventually participate as Voluntarily Scheduled Resources (VSRs) or scheduled loads. The AEMC says mandatory scheduled participation should not be imposed at this stage, given the diversity of operating models and the potential costs or constraints for facilities providing critical computing services. However, it considers the VSR framework could provide a stronger pathway for integrating flexible large loads into the market once implemented.
As the VSR framework has not yet commenced, the commission is also seeking feedback on interim arrangements. One option would be a temporary Registered Participant category for large IBL operators, allowing AEMO to issue directions directly to facility operators rather than through their existing Registered Participant, which is typically their electricity retailer.
Further technical requirements
The second area of reform is around additional technical requirements intended to give AEMO and network service providers greater real-time visibility and control over large loads.
For communications and monitoring, the AEMC is consulting on a minimum access standard requiring large IBLs to provide real-time SCADA telemetry to AEMO, including active power and, for transmission-connected facilities, reactive power. A more comprehensive automatic standard would also provide two-way communications and remote-control capabilities, including over active-power limits and ramp rates. A negotiated standard between the two levels could be available where appropriate.
The commission is also consulting on a minimum limit for the rate at which large IBLs can change their active power demand: ±40MW per minute for the mainland NEM and ±10MW per minute in Tasmania. Faster rates could be negotiated where operators can demonstrate that their proposed demand changes can be accommodated without adversely affecting power system security.
The AEMC says these figures are initial proposals for consultation and will require further consideration of local and system-wide impacts, including the potential for multiple facilities to change demand at the same time. It also notes that workload management, power capping, rack-level controls and energy storage could help data centres manage their demand profiles.
The consultation builds on the AEMC’s final rule on NEM access standards, published on the same day, which established a 30MW definition for large IBLs and introduced new disturbance ride-through and instability-monitoring requirements. The new consultation would extend that framework beyond connection-stage technical requirements to address the ongoing operational visibility and management of large loads.
The rule change is part of a wider programme involving the AEMC, AEMO and Australian Energy Regulator, covering data centre energy contracting obligations, network augmentation costs, connection processes and operational visibility. Submissions on the consultation paper are due by 17 December 2026. The AEMC intends to publish a draft determination on 1 April 2027, subject to the complexity and materiality of issues raised by stakeholders.