Gridlock
Alexander Hoysted
Transmission Bottlenecks Threaten Australia’s Digital Future.
By 2030, Australia’s data centres could consume 15% of our national electricity per Morgan Stanley research, more than almost every other industry in Australia. But, there’s an obstacle that could stall this clean-powered boom before it begins:
The grid.
The Hidden Constraint Behind the Clean Cloud
Data centres are built for speed — high reliability, constant uptime to maximise RoI on the computer chips inside.
Renewables, on the other hand, are built for abundance — vast solar and wind farms spread across Australia’s Renewable Energy Zones (REZs).
The problem? The grid between them is already stretched.
AEMO’s Integrated System Plan calls for 10,000 km of new transmission lines by 2033 to connect renewable generation to the National Electricity Market. Yet administrative delays, local opposition, and cost blowouts mean even shovel-ready projects face years of uncertainty.
That means every new megawatt of renewable energy, every new data-centre rack, is fighting for the same limited capacity.
Why Gridlock Matters
Projects are stuck in the queue: renewable projects are ready but can’t connect to the grid.
Counterparty risk: without transmission certainty, financiers hesitate to back new projects.
Developers are retreating to the grid’s edge: finding that sweet spot between cheap real estate and cheap electricity
The result? The digital economy’s fastest-growing infrastructure could be built where the grid is dirtiest, a growth industry whose carbon impact has tripled with the advent of Gen-AI.
A System Designed for the Last Boom
Our transmission system was built for coal moving east, not data moving west. Power used to move in one direction. Now, with renewables batteries and new potential sources of regional electricity demand, power must flow everywhere, all at once. This inversion is a massive engineering and policy challenge, a transition that could set the country up for prosperity decades into the future.
A Way Forward
We believe gridlock is not inevitable. Hopefully, it’s a bump in the road. Here’s three things industry and policymakers can prioritise to get us to the promised land:
Accelerate REZ-to-Load Corridors.
Help the EPBC fast-track the most critical transmission routes linking REZs to high-growth digital and industrial hubs, similar to the EU’s TEN-E Priority Projects list.Engage productively with REZ communities.
Recent inquiries have shown that regional communities want high quality engagement and benefit sharing. We have to adjust how we approach these projects and make doubly sure communities share in the benefits.Co-locate Data Centres and RE sites.
Microsoft recently opened a 300MW solar farm to supply its data centres through a power-purchase agreement (PPA). The next step could be co-locating power-hungry data centres, cutting transmission requirements and easing the bottleneck.
These measures would cut investor risk, unblock projects, and make it possible for Australia’s data economy to run on firmed renewables.
CZI’s Vision
Build where the energy is clean, not just where the cables already run.
Time is moving fast. The next 12–18 months will determine whether we clear the path or stay stuck in the wires.
Alexander Hoysted
