Data centres and connection to the NEM: AEMC's new access standards for inverter-based loads

The access standards set a permissible range of technical performance requirements that connection applicants must meet to connect a plant to the power system. The New NEM Access Rule aims to strengthen the framework for inverter-based loads, including large data centres, and make improvements to the requirements applying to other plant, including generators and high voltage direct current links. The New NEM Access Rule follows amendments made to the NER in 2025, pursuant to Improving the NEM access standards - Package 1, which sought to clarify the NEM access standards and make them more fit for purpose for inverter-based resources.

The AEMC also opened consultation on a related rule change request from the Australian Energy Market Operator (AEMO), Operational integration and visibility of large inverter-based loads (Rule Change Request), on 12 November 2026. The Rule Change Request builds on the New NEM Access Rule. This article summarises both the New NEM Access Rule and the Rule Change Request.

In addition to the rules relating to connection under the NER, connection applicants seeking connection to the NEM are still subject to jurisdictional requirements that may exist in the state or territory in which connection is sought.

Background to the change: growth of large inverter-based loads

AEMO's 2026 Electricity Statement of Opportunities projects data centre electricity consumption to increase around sevenfold over the next decade, increasing data centres' share of operational demand from approximately 3% to 13%. Inverter-based loads can rapidly respond to changes in power system conditions by changing their electricity demand, compared with other traditional loads. This can lead to grid instability and adversely affect other electricity users. If multiple loads respond in a similar manner, this can have a significant impact on the NEM. The New NEM Access Rule and the Rule Change Request intend to manage these risks, whilst supporting the integration of new demand and the benefits associated with data centres and other loads.

Key amendments by the New NEM Access Rule

Key amendments to the NER made by the New NEM Access Rule include:

1. establishing a clear framework for classifying large inverter-based loads;

2. requiring AEMO to develop modelling guidelines;

3. requiring non-registered participants to comply with applicable performance standards;

4. imposing disturbance ride-through access standards;

5. introducing an instability monitoring access standard; and

6. other changes to the access standards frameworks.

Framework for the classification of inverter-based loads

• Inverter-based load: The New NEM Access Rule amends the definition of inverter-based load to provide a technology-neutral basis for identifying inverter-based loads, focusing on the use of power electronic technology, including inverters, converters and rectifiers.

• Large inverter-based loads: The New NEM Access Rule introduces a new threshold-based definition of a large inverter-based load, as an inverter-based load with a nameplate rating of 30 MW or more. The Schedule 5.3 access standards will automatically apply to large inverter-based loads, regardless of whether they connect to a transmission or distribution network. It is expected that most data centres have a proposed capacity above 30 MW, and will therefore be subject to Schedule 5.3 of the NER.

  For hybrid load configurations, the large inverter-based load classification applies to the inverter-based load plant only and not to the non-inverter-based load plant. Only the nameplate ratings of inverter-based load components are relevant to determining whether the 30 MW threshold is met. For example, a connection comprising 20 MW of inverter-based load and 20 MW of non-inverter-based load plant would not be considered a large inverter-based load merely because its combined capacity is 40 MW.

  Alongside the New NEM Access Rule, the AEMC has published a fact sheet that outlines how Schedule 5.3 applies to different load types and sizes.

• Inverter-based loads below 30 MW: The New NEM Access Rule grants a Network Service Provider (NSP) discretion to determine the application of the Schedule 5.3 access standards to inverter-based loads with a nameplate rating below 30 MW. In such circumstances, the NSP must consider whether connecting or operating the load could adversely affect the quality or security of supply to other network users.

• Inverter-based loads in a cluster or with a potential aggregate impact: When determining whether a load should be treated as a large inverter-based load, NSPs are now able to consider the aggregate impact of an inverter-based load connection with other electrically proximate inverter-based load connections, where it is reasonable and appropriate to do so.

• Integrated inverter-based loads forming part of an integrated resource system: Schedule 5.3 requirements apply to an integrated inverter-based load that consumes electricity from a network (other than for auxiliary purposes).

• Non-inverter-based loads: The framework for applying access standards to other loads (non-inverter-based loads) remains unchanged. For distribution-connected non-inverter-based loads, Schedule 5.3 applies where the NSP considers the connection or operation of the plant could adversely affect the quality or security of supply to other network users. For transmission-connected non-inverter-based loads, Schedule 5.3 applies automatically, except for those requirements that specifically apply to inverter-based loads.

Development of modelling guidelines

Modelling enables AEMO and NSPs to assess the performance of loads under normal operating conditions and during disturbances. This supports the assessment of whether plant can meet applicable access standards, identifies potential risks to the power system and informs connection decisions. To address the recommendation that AEMO clarify modelling requirements for large inverter-based loads, AEMO must now develop, publish and maintain guidelines for modelling to be undertaken by Schedule 5.3 Participants, in accordance with principles established in the NER. These guidelines must be consistent with the following broad modelling principles, with requirements to:

• be proportionate to the size, complexity and potential impact of the plant;

• be limited to information reasonably necessary to assess connections and compliance with applicable standards and Chapter 5 obligations;

• be consistent with modelling requirements imposed on similar plant;

• have regard to the practical availability, maturity and validation of modelling information; and

• support an efficient connection process.

Requirements for compliance with applicable performance standards by non-registered participants

Non-registered participants must commit to meeting proposed performance standards. Connection agreements must include a commitment to ongoing compliance with applicable performance standards, including how the connection applicant intends to comply with these standards. In specifying how it would undertake its commitment, non-registered participants may have regard to the Reliability Panel's Template for Compliance Programs. AEMO's performance standards register is extended to all Schedule 5 Participants.

Disturbance ride-through access standards

There are new disturbance ride-through access standards for inverter-based loads subject to Schedule 5.3. These inverter-based loads must remain connected through specific voltage and frequency disturbances and meet performance requirements during and after those disturbances. Connecting loads (both inverter-based loads and non-inverter-based loads) must also provide information about their ride-through capability when requested by the NSP.

Instability monitoring access standard

There is a new instability monitoring access standard for large inverter-based loads. Where the NSP or AEMO considers a large inverter-based load could reasonably contribute to instability, the large inverter-based load must be capable of detecting and responding to specified forms of instability, including instability in voltage, reactive power and active power at the connection point.

Other changes to the access standards framework

The New NEM Access Rule also makes other more technical changes to the access standards framework. These changes include clarification of the interpretation and application of Schedule 5 of the NER for certain equipment, such as uninterruptible power supply systems. The New NEM Access Rule also gives greater flexibility to system strength and load shedding requirements, extends testing and compliance arrangements to participants that are not Registered Participants, and gives AEMO more time to complete its future reviews of the access standards if the issues are complex.

What the New NEM Access Rule means for existing projects or those underway

Modifications to a connected plant

For modifications to existing connections, it is expected that clause 5.3.12 of the NER will apply. Clause 5.3.12 provides a process for assessing proposed alterations to connected plant where the alteration will affect the plant’s performance against a technical requirement in Schedule 5.3 or Schedule 5.3a that is an AEMO advisory matter. If clause 5.3.12 applies, details of the proposed alteration must be submitted to the NSP. Where an expansion of an inverter-based load plant results in the inverter-based load exceeding a nameplate rating of 30 MW, the applicable access standards must be determined in accordance with Schedule 5.3.

Transitional arrangements

How the transitional arrangements apply depends on how far a project has progressed as at the commencement date (being 12 November 2026).

• Connection applications without confirmed negotiated access standards: The new access standards apply immediately to connection enquiries and connection applications in circumstances where acceptance under clause 5.3.4A had not yet been received for each proposed negotiated access standard.

• Connection applications with confirmed negotiated access standards: Where a valid connection application had already been made, the technical requirements had already been accepted under clause 5.3.4A of the NER before 12 November 2026, and an offer to connect had not yet been received, the old access standards continue to apply. However, the new access standards will apply from 12 May 2027 if a connection agreement has not been entered into by that date. Connection applicants may also elect to apply some or all of the new access standards to their connection application during the six-month period.

• Existing offers to connect: If an offer to connect had been received, but a connection agreement had not yet been entered into, the old access standards continue to apply.

• Plant alteration proposals: The old standards continue to apply unless, by 12 May 2027, the NSP has not advised that it and AEMO are satisfied with the proposal under clause 5.3.10 or 5.3.13. If that advice has not been given by then, the new standards apply.

AEMO's Rule Change Request

The AEMC has also published a consultation paper on AEMO's Operational integration and visibility of large inverter-based loads rule change request (ERC0455). The Rule Change Request aims to ensure AEMO and networks have consistent visibility of large inverter-based load behaviour and an appropriate framework to manage significant and rapid change in inverter-based load demand. AEMO considers the NER do not currently provide this.

The AEMC is seeking feedback on:

1. the risks and challenges of the increase in large inverter-based load connections; and

2. AEMO's Rule Change Request, which comprises two main aspects:

   • a registration framework for large inverter-based loads; and

   • additional access standards for large inverter-based loads.

Risks and challenges of the increase in large inverter-based load connections

The AEMC is interested in stakeholder feedback on:

• AEMO's concerns that the current regulatory framework does not adequately provide AEMO and NSPs with sufficient visibility of large inverter-based loads across operational and planning timeframes;

• key gaps in the current regulatory framework and how material they are for forecasting, planning and power system operations;

• operational risks associated with rapid and material changes in large inverter-based load demand;

• the extent to which aggregated or coordinated behaviour of multiple large inverter-based loads may create additional risks;

• whether current communication arrangements between AEMO, NSPs and large inverter-based loads may not support timely coordination when demand changes materially or during power system events; and

• issues that are likely to become more material as the number and scale of large inverter-based loads increase.

Registration framework for large inverter-based loads

The AEMC is seeking views on whether to adapt the current registration framework to include large inverter-based loads (rather than introducing a permanent Registered Participant category), including consultation questions relating to:

• the benefits of new and explicit registration requirements for large inverter-based loads in the NER, as well as the proposed objectives of registration in the NER;

• whether large inverter-based loads should be required to register as voluntary scheduled resources or as a scheduled load;

• whether a new large inverter-based load unit classification should be introduced, or whether an interim Registered Participant category is needed;

• whether the 30 MW threshold introduced by the New NEM Access Rule is an appropriate basis for registration; and

• how the registration requirements and any associated obligations should apply to existing and new large inverter-based loads.

Additional access standards

The AEMC is seeking views on new access standards for large inverter-based loads, covering communications, telemetry, remote monitoring and control requirements, including consultation questions relating to:

• whether minimum requirements under different reporting frameworks in the NER provide sufficient information to AEMO to support improved operational visibility of large inverter-based loads;

• whether back-up generation for large inverter-based loads should be exempted from registration under the NER and any potential associated issues and mechanisms to resolve these issues;

• what communications, telemetry and remote-control requirements are appropriate for large inverter-based loads, what responsibilities should apply to NSPs and AEMO in terms of data sharing, the preparedness of stakeholders to facilitate real-time communication, and costs and difficulties large inverter-based loads may face in meeting these monitoring obligations; and

• the management of the rate of change of active power from large inverter-based loads.

The AEMC is also seeking feedback on transitional arrangements, implementation considerations and mechanisms to assess this specific rule change.

Want to respond to the AEMC's consultation paper?

Submissions on the consultation paper will close on 17 December 2026. The draft determination is expected by 1 April 2027 and the final determination by 22 July 2027.

We would be pleased to assist with any proposed submissions to the AEMC's process.