Prime Minister Anthony Albanese announced proposed legislation requiring large-scale data centres to operate as net generators, a policy shift that lands amid escalating network tensions in New South Wales. The federal intervention aims to force new, energy-intensive loads to fund their own supply. It comes as Ausgrid formally requested that Transgrid reduce transmission charges, alleging the TNSP is failing to share cost efficiencies despite its network reaching capacity. Ausgrid also criticised Transgrid for inadequate collaborative planning to manage the rapid influx of data centres connecting to the state's grid.
The proposed policy creates a powerful new incentive for dispatchable renewables, a category already dominating market investment. Australia's NEM connected a record 9.1GW of new generation and storage to full output in FY26, more than double the result achieved in the previous financial year. Battery storage dominated this expansion. Underscoring the drive for dispatchability, a Danish developer also secured financing to integrate a two-hour battery with an existing solar farm. This AC-coupled project will convert the operational asset into a hybrid facility, a model that could prove vital for meeting new, firm demand from facilities like data centres.
This domestic push for storage is mirrored by a global investment surge, prompting a strategic rethink of manufacturing supply chains. In Germany, shareholders approved initial works for a 900MW/1.8GWh battery, part of a 15GWh-plus pipeline accelerated by recent grid fee reforms. Spain allocated €165 million for seven pumped hydro projects totalling 2 GW, while Fidra Energy reached financial close on a 500MW battery in the UK. To meet this accelerating international demand, global battery manufacturers are establishing alternate hubs across India, Southeast Asia, and the Middle East to diversify supply chains away from China.
While batteries provide crucial firming capacity, new wind generation remains essential for bulk energy supply. A new analysis urges Australian wind farm operators to prioritise performance optimisation of the current generation fleet. Improving existing asset efficiency is identified as a critical, immediate lever for achieving the federal government's 82% renewable energy target by 2030. Meanwhile, large-scale construction continues to advance overseas, with RWE installing the 36th of 72 turbines at its 1.1GW Thor offshore wind farm, marking the project's halfway point.
Regulators are working to adapt market frameworks to these new physical realities as NEM spot prices remained stable, averaging $70.31/MWh. AEMO has commenced planning for its 2026 Transition Plan for System Security, considering stakeholder feedback from the previous cycle. The market operator has also opened several discussion papers on key market procedures, including a review of gas market parameters and a new network access model, with submissions due throughout August.