Delivering energy infrastructure needs people, capability, and cohesion
Australia's energy transition requires more than technical plans. Discover four ways to build the people, culture and capability to deliver infrastructure at scale.
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Traditionally, demand growth in power systems has been gradual and incremental. Residential demand has largely been concentrated within metropolitan areas, while large industrial facilities were typically located in outer metropolitan zones or designated industrial regions.
For the first time in decades, the biggest draws on electricity grids are not coming from facilities built near power stations. Data centres' preference to be close to cities and optic fibre will reshape the power system, challenging existing assumptions about grid design, system strength, stability and security.
Unlike historical industrial loads, data centres are frequently located in regions with lower fault levels, high residential loads, and further away from generation. This article explores why grid-forming energy storage provides a scalable pathway to both preserve system security and unlock further digital expansion.
Traditionally, industrial facilities’ loads were modest relative to total grid demand. Most ranged between 1–20 MW when connected to distribution networks, and 20–100 MW when connected to transmission lines directly at a single point of connection.
Occasionally networks hosted larger loads in the 200–600 MW range, such as Portland Aluminium (historically supplied by Yallourn and Loy Yang power stations) and Tomago Aluminium (supplied within the NSW coal-dominated Hunter Valley system). These historical mega-loads were embedded within electrically strong regions, characterised by high fault levels and proximity to coal-fired generation.
Because synchronous generators (large spinning units, such as coal, gas and hydro turbines) rotate in sync with the grid frequency, their heavy rotating mass stores kinetic energy, or inertia, which stabilises the grid by slowing the rate of frequency change during faults or disturbances. Inertia is a critical element of system security.
The location of those mega-loads was structural and intentional, not incidental. Proximity to synchronous generation reduced bulk transfer dependency, provided high system strength and inertia, and improved voltage stability under contingency conditions. In effect, their location inherently supported system security.
What is emerging today is not simply larger demand, but a structural shift in load composition and location.
Massive data centres (the ‘hyperscalers’) often more than 300 MW, are aiming to connect to the network. Unlike historical industrial loads, these facilities are frequently located in regions with lower fault levels, high residential loads, and further away from generation. These digital mega-loads are choosing metropolitan areas primarily because of digital infrastructure, latency constraints, and redundant digital routing options.
Digital infrastructure, such as high-bandwidth data connections, are pivotal for the operation of hyperscale data centres as they are heavily reliant on high-speed transmission of digital data. Power availability and system security then simply becomes a constraint to solve.
For the first time in decades the mega-loads are not built around power stations – they are reshaping the power system around themselves.
As these new digital mega-loads are often located further from generation hubs, they rely heavily on long transmission import paths, reduce local voltage stability margins and have increased sensitivity to loss of a single element in the power system, a so-called N-1 contingency, such as transmission line, or transformer.
For system operators, maintaining security becomes more complex. The loss (or sudden drop in demand) of a large data centre can produce fast rates of change of frequency (RoCoF), and voltage control becomes more sensitive in lower-strength environments. In this context, stricter ride-through and performance requirements may need to be imposed on large data centres to mitigate dynamic voltage and frequency instability risks and ensuring system security.
Due to their digital requirements, relocation of data centres to synchronous generation regions is impractical. As a result, the grid cannot rely on historical co-location logic to preserve system security. Instead, new technologies such as inverter-based resources must play a greater role. Where synchronous strength cannot be co-located, it must be engineered.
Energy-dense, grid-forming battery systems offer a practical pathway to restore local strength, fast frequency response, and dynamic voltage support when deployed in proximity of those digital mega-loads. In this emerging paradigm, storage is no longer just an energy-shifting tool; it becomes a system security asset.
Energy storage systems operating with grid-forming functionally can emulate dynamic behaviour of synchronous machines by providing synthetic inertia response and support primary frequency response without relying on phase-locked loop tracking. This enables them to remain stable in lower-strength environments while contributing to frequency control. Their millisecond-scale dynamic response also allows them to act as shock absorbers during disturbances, rapidly injecting or absorbing power to steady the system and reduce sudden changes in frequency and voltage.
Where synchronous strength cannot be co-located, it must be engineered.
The rise of digital mega-loads is not a temporary phenomenon, rather it is a structural shift in demand. But grid-forming energy storage provides a scalable pathway to both preserve system security and unlock further digital expansion. In the decades ahead, resilience will not come from rebuilding the past, it will come from engineering the grid for the loads of the future, and embracing emerging technologies to address network stability and security concerns.
Reforms such as the proposal from the Australian Energy Market Commission to enhance National Electricity Market access standards[1] are pivotal to engineering the energy network to align with the evolving paradigm of mega-loads, inverter-based resources, and emerging technologies.
[1] May 2025, Improving the NEM access standards – Package 2, Australian Energy Market Commission (AEMC), accessed February 2026.
This article was first published by 'The Energy' in February 2026.
Power Systems Practice Leader – VIC & SA, Australia
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