Digging into the details of NSW’s new data centre guidelines that were announced today. These are for a ‘go faster’ process as opposed to minimum standards of the sort being discussed at a national level.

To meet the guidelines, data centres will need to contract enough new renewable generation to match its annual electricity consumption from it’s fourth year of operation, with at least 40% wind, plus 4 hour storage for 25% of generation capacity.

Data centres must also be able to reduce grid consumption by 25% of their forecast average load for up to two hours, load-shifting ‘where possible’ and then on-site/proximate renewables and storage. Diesel generators explicitly cannot be used to meet that test.

Where are the gaps?

A hyperscaler could still potentially sign a PPA with a project that was already going to be built, provided it gets in before the final investment decision date.

There’s no exclusion of gas for on-site generation like we’re seeing in the US. Here in NSW, Cloud Carrier recently proposed a 700MW gas-fired plant in Moss Value arguing the local grid can’t provide the required capacity.

Gas doesn’t count towards the mandatory battery/pumped storage, nor the grid-flexibility rules, so it seems an unlikely path for operators that aim to comply with these guidelines – but it remains unclear whether data centres will be waved through regardless.

Renewable generation is only matched on an annual basis, so even data centres meeting these guidelines will increase demand for dispatchable generation when there is insufficient wind, solar and storage.

If gas ends up filling that gap, Australia will be following the US down the path a massive gas-demand boom.

I haven’t dug into the water or community aspects yet – to follow!