Public consultation is closed

Submissions closed on 14 September 2026 at 5:00 pm AEST. Read what happens next. 

Watch our recorded webinar held on 24 August 2026 to learn more. 

We have provided the webinar slides (PDF, 3.25 MB) for reference only. 

Planned investment in data centres in NSW will create a major new source of demand for electricity in the state. 

New data centre demand means more investment in electricity infrastructure will be needed. 

Given the scale of the task, we are proposing regulatory reforms that seek to ensure data centres can be efficiently connected and supplied electricity without increasing electricity prices and risks for households and small businesses. This is consistent with the principles in the NSW Data Centre Guidelines, including that data centres should impose no net costs to other electricity customers and fund additional supply of energy.

Why we are consulting

Data centres are a key investment opportunity for NSW and as electricity demand from this sector grows, we need to make sure that NSW households and businesses are not paying costs for the infrastructure needed to support them.

As of July 2026, data centres are seeking network connections with a total capacity of up to 28 gigawatts (GW). Of these, data centres seeking around 13 GW of capacity are in advanced discussions to connect. 13 GW is more than the average daily electricity demand in NSW.

We need reforms to make our electricity network regulatory frameworks fit-for-purpose for data centres. We also want to capitalise on the opportunity to support new renewable energy generation and storage capacity.

These reforms will help reduce pressure on the network, minimise costs and safeguard our consumers and local communities.

The reforms aim to:

  • improve network connections and planning
  • improve network cost allocation and recovery
  • support implementation of measures in the Guidelines.

Read the consultation paper (PDF, 1 MB)

Data centres in NSW

Data centres are critical infrastructure, enabling NSW to:

  • remain competitive in an increasingly digital future while strengthening our capability 
  • create jobs
  • attract private investment to boost economic growth.

That’s why the NSW Government is supporting productive data centre investment to back this fast-moving sector. As of July 2026, 20 data centre projects valued at $51.4 billion in the State Significant Development pipeline are set to provide a huge economic boost for the state.

To harness the benefits of this investment and mitigate the impacts, the NSW Government has released the NSW Data Centre Policy Framework (Framework), which consists of 3 pillars:

  • Pillar 1: NSW Data Centre Guidelines (Guidelines) to support planning application assessments and set principles for data centre development in NSW. 
  • Pillar 2: Regulatory reforms to ensure equitable cost recovery for energy infrastructure.
  • Pillar 3: An IPART review to consider the full recovery of costs of water provision to data centre customers.

This framework will ensure energy, water and environmental impacts are addressed to provide the best outcomes and benefits for our data centre sector, investors, businesses and communities across NSW. 

Pillar 2 will see the NSW Government progress regulatory reforms to ensure the cost of additional energy infrastructure investment to enable growth in the sector is recovered from data centre operators, imposing no net costs on households or businesses. The NSW Government has introduced the Electricity Infrastructure Investment Amendment Bill 2026 to enable these reforms. 

Visit the Infrastructure NSW website for more information about the NSW Data Centre Policy Framework. 

If you have any questions about the NSW Data Centre Guidelines, please email [email protected] 

What happens next

We will review submissions during the consultation period and feedback to inform new regulations intended to be made under the Electricity Infrastructure Investment Act 2026, subject to the Electricity Infrastructure Investment Amendment Bill 2026 being passed.

Submissions will be published on this webpage unless confidentiality has been requested.

Further updates will be published on this web page and NSW Government Gazette website when outcomes are finalised. 

If you have any questions about this public consultation, please email [email protected] 

Consultation period

17 August 2026 to 14 September 2026

Key documents

Related reforms

The reforms outlined in the consultation paper are designed to address cost recovery issues that are also being examined by the Australian Energy Market Commission (AEMC). The Australian Government recently submitted 2 rule change requests to address issues associated with network infrastructure cost recovery arrangements under the National Electricity Rules.

The AEMC will shortly commence consultation on these rule change requests which can be viewed at: Cost recovery for network augmentations – Package 1 and Cost recovery for network augmentations – Package 2

Reforms to national regulatory frameworks will take time to develop and implement. Given the scale and pace of data centre development in NSW, the NSW Government has chosen to act now to protect the interests of consumers and communities while also facilitating efficient investment. The Government will also continue to monitor and collaborate regarding changes being considered at the national level to promote alignment and avoid duplication. State-based regulatory requirements may be sunsetted where national reform means they are no longer required.