The Australian Energy Market Commission (AEMC) has released the first of two major reforms to the National Electricity Market (NEM) access standards, which it said are fit for the evolving electricity generation landscape to ensure grid security and fair access.

Starting Aug. 21, 2025, the reforms will address technical connection standards and the rising demand from energy-intensive facilities such as AI-driven data centers, which have historically destabilized the grid and affected consumers.

AEMC Chair Anna Collyer said the reforms will help accelerate Australia’s energy transition while maintaining system security.

“This is the most significant modernization of the NEM technical connections standards since 2018, coming at a critical time when the pace of connections needs to accelerate dramatically to meet Australia’s renewable energy targets,” said Collyer. “With renewable energy projected to triple by 2030 and utility-scale batteries to increase fivefold in the same period, these reforms will help reduce connection bottlenecks while maintaining system security.”

Package 1 – Grid Connection

Improving the NEM access standards – Package 1 rules will apply to projects that have not received a network service provider (NSP) connection enquiry response by Aug. 21, 2025. Projects still completing their connection applications may choose to apply some or all of the new access standards.

The reforms update access standards for generators, integrated resource systems, and synchronous condensers; amend standards for high-voltage direct current (HVDC) links; and include transitional provisions for existing network plant and ongoing connections.

Package 1 aims to clarify technical requirements, reduce costly negotiations, and better support inverter-based resources such as solar, wind, and batteries. It also broadens application to synchronous condensers and HVDC links essential for system stability.

The standards will apply by plant type rather than registration status to eliminate inconsistencies—such as synchronous condensers operated by different entities facing different requirements. The Commission aims to integrate more synchronous condensers into the NEM.

The Commission issued a differential rule that excludes the Northern Territory, meaning the final rule will not amend the NT National Electricity Rules (NER).

Package 2 – Data Centers

Improving the NEM Access Standards – Package 2 addresses the projected growth of large-scale electricity users, focusing on AI-driven data centers.

Collyer said the rise of artificial intelligence is fueling unprecedented demand for data centers in Australia, with some sites potentially consuming as much electricity as small cities.

“Package 2 proposes new standards to ensure these facilities can respond appropriately during power system disturbances and don’t inadvertently make problems worse during system events,” said Collyer.

An AEMC statement said a recent incident in the United States underscored the need for reform, when 60 data centers using 1,500 MW disconnected simultaneously during a system disturbance, worsening grid stability.

The Commission invited stakeholder feedback on Package 2 by June 19, 2025.