From AEMO to Transgrid, NEXTDC and AGL, Australian Energy Week 2026 hosted speakers from all corners of the energy sector last week.
AEMO chief executive officer Daniel Westerman kicked off proceedings on day one, delivering a keynote that explored everything from the battery boom, the rise of “flexible energy use”, and the power conundrum posed by Australia’s growing data-centre fleet.
While it feels like data centres are dominating the headlines, “they’re not new”, Westerman explained.
“In fact, average data-centre demand through Q1 of this year in the NEM (National Electricity Market) was nearly 600 megawatts,” he said.
“However, with the incredible increase in capability and adoption of AI, data centres are becoming the backbone of our digital economy even more quickly, and a powerful engine for Australia’s future prosperity and growth.”
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So how is AEMO approaching this challenge?
“At AEMO we’re focused on delivering fast and efficient connections, so that major new energy users like data centres can connect without shifting costs or risks onto existing users,” Westerman said.
“In the first quarter of this year, there were 11 data centres totalling 5.4 gigawatts of ultimate load working through a transmission network connection.
“Our forecasts already considered growth in demand from data centres in both transmission and distribution networks, and considering the strong development activity we’re seeing, it is likely that our current forecasts will materially increase.”
Along with material changes factoring in the rise of home batteries, we can expect data centres to be a key fixture in the upcoming 2026 Integrated System Plan, set for release on June 25.
After Australia’s largest data-centre precinct – a 350-hectare AI hub sitting alongside the Melbourne Renewable Energy Hub in Plumpton – was publicised in early June, Federal Minister for Climate Change and Energy Chris Bowen weighed in, affirming that new data centres would need to “bring their own renewable energy”.
“Last month I put to the state and territory energy ministers a framework which they almost unanimously adopted,” he said. “Every state and territory, with the exception of Queensland, adopted that framework.
“That framework requires new data centres to, one, bring their own renewable energy. That is additional renewable energy, not renewable energy that is going to be built anyway.
“Two, they must be flexible and have redundancy built into the system, so they can turn up and down as necessary.
“And three, ideally, they should be located near power generation.”
