Australia has become one of the world’s most attractive destinations for hyperscale data centers, ranking among the top five to ten markets globally in terms of capacity. Drivers include high availability of land in renewable energy zones, renewable energy penetration of more than 40% in the National Electricity Market (NEM), geopolitical stability, membership of Five Eyes and proximity to demand centers in Asia and the Pacific.
The Australian Energy Market Operator (AEMO) 2025 Integrated System Plan (ISP) inputs predict a notable increase in data center electricity consumption – from 4 TWh (2% of grid demand) in 2025 to 12.0 TWh (6%) in 2030 and 34 TWh (12%) in 2050 under the Step Change scenario. This growth is primarily driven by AI-intensive workloads concentrated in Sydney’s established pipeline and Melbourne’s emerging hubs.
The NEM’s radial transmission topology, built to serve scarce loads across vast areas, is now increasing supply vulnerabilities as hyperscale capacity agglomerations in Sydney and Melbourne, which represent approximately 80% of national deployments, proliferate.
The retirement of large synchronous generators such as Liddell Power Station has led to a sharp decline in system strength. Meanwhile, zero-inertia intermittent renewable generators, together with the rectifier and DC bus converter architectures of large-scale data centers, provide further emphasis on voltage stability, frequency regulation and thermal headroom according to AEMO’s large load access standards.
Loading profiles
Large-scale data centers require extremely high power density, with sustained base loads at 80% to 100% utilization rates and the ability to handle rapid ramp rates of 10% to 50% per minute due to GPU-driven bursts during AI training, inference spikes, or retraining cycles.
These demands are further intensified by cooling loads, while strict standards are maintained:
· Less than 10 milliseconds acceptable downtime
· Minimal harmonic distortion
· Robust voltage and frequency ride-through capabilities
Grid-forming inverters allow battery energy storage systems (BESS) to act as traditional power generators, shifting their role from energy arbitrage assets to system strength providers. They help keep the grid stable by providing their own voltage reference, which smooths out sudden changes in the system. This also allows the BESS to operate independently during outages, support black-start capabilities and provide fast, inertial-like support during grid outages.
Importantly, grid-shaping inverters have the potential to streamline the grid connection process for hyperscale data centers by providing benefits in system strength, dynamic reactive support and voltage control. This could enable self-healing in weak nodes.
Grid-forming BESS as a path to faster, more secure connections
Co-locating BESS with grid-forming inverters next to hyperscale data centers offers several technical and operational benefits.
These systems can handle the rapid power fluctuations generated by AI workloads, support the data center when it needs to function independently during outages, and help the site restart after a power outage. They also provide short-term support to the electrical grid, such as helping to manage voltage and provide fault current, making it easier to connect large, energy-intensive facilities.
In weaker parts of the electricity grid, this technology can also simplify and speed up the connection process. Because grid-forming BESS can stabilize the system themselves, they can meet AEMO’s system strength requirements without the need for additional equipment. This can reduce or even avoid the cost of installing separate synchronous condensers – often requiring multi-million dollar assets when using standard grid-following inverters.
However, the question of whether grid-forming BESS can completely replace the traditional ‘inertia’ of rotating generators is still being investigated. While recent AEMO studies show that these systems can slow frequency change and aid recovery during disruptions, it is not yet clear whether this synthetic response can reliably replace the natural inertia of conventional machines. In this context, AEMO has identified further testing of the network-building BESS performance as a priority.
In this evolving landscape, technical advisors play a critical role in helping developers navigate the technical, regulatory and commercial complexities of deploying grid-building BESS to hyperscale data center locations. Consultants ensure rigorous modeling of grid connections, validate GFM inverter performance against AEMO requirements, guide technology selection, and optimize co-location design to reduce approvals and accelerate timelines. By identifying gaps in system strength early and structuring an evidence-based connectivity strategy, technical advisors enable proponents to confidently deploy the network-building BESS as a stabilizing backbone for Australia’s rapidly growing data center sector.
As AEMO expands its understanding of network-building capabilities, these systems, supported by strong technical advisory input, are well positioned to transition from ‘promising’ to ‘proven’, providing the foundation for the next generation of secure, highly available hyperscale developments across the NEM.
Author: Carlos Carrillo, consultancy managerAustralia and New Zealand, Enertis Applus+
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of the author pv magazine.
This content is copyrighted and may not be reused. If you would like to collaborate with us and reuse some of our content, please contact: editors@pv-magazine.com.
Popular content
