At a glance
Transgrid's capacity allocation policy took effect on 14 August 2026 and applies to any load of 30MW or more.
A data centre that signs a connection agreement has three months to show an approved consent, land, construction contracts, equipment orders and financing.
Land, contracts, equipment orders and financing are the developer's to produce, and the planning consent is the state's to grant.
The consent has to be granted at the capacity written into the connection agreement.
The state's consultation, open until 14 September, would allocate the same capacity by competition, with an entry bond of A$30,000 a megawatt.
On 14 August 2026 Transgrid, which owns and runs the high-voltage transmission network across New South Wales, brought in a policy that sets out what a data centre has to prove before its grid capacity is locked in. Transgrid published it on its network connections page.
The Network Capacity Allocation Policy applies to any inverter-based load of 30MW or 30MVA and above, which in practice means a large data centre campus. A signed connection agreement now holds the capacity provisionally, for Transgrid's own network planning. The allocation becomes final only if five conditions are met inside three months. Miss them, and the agreement can be terminated and the developer, in the policy's words, "may lose its transmission capacity allocation".
Settled land, awarded construction contracts, executed equipment orders, and a guarantee or a board approval to proceed are all things a developer can produce itself. The planning consent is the one condition a developer cannot produce. The New South Wales planning department has to grant it, at a capacity that matches the connection agreement, and the Foreign Investment Review Board (FIRB) has to approve where a project needs it.
Transgrid's policy started on 14 August. New South Wales published its data centre guidelines on 17 August and opened a consultation on connection costs the same day.
Transgrid wrote the criteria into its connection agreements
Transgrid enforces the conditions through the connection agreement itself. The policy also states that it "does not supersede the connection process as set out in Chapter 5 of the National Electricity Rules". Transgrid says the criteria are "aligned with the criteria used by the Australian Energy Regulator (AER) and the Australian Energy Market Operator (AEMO) to define when a project is committed for planning and forecasting purposes". Those tests come from the regulatory investment test for transmission and from AEMO's Integrated System Plan, the national forecast of what the grid will need.
Transgrid took the 30MW threshold from the Australian Energy Market Commission (AEMC), setting it "consistent with the AEMC's draft rule change for large data centre connections". That draft would lift the threshold for large inverter-based loads from 5MW to 30MW. The commission has pushed its final determination on that standard to 29 October 2026, citing the complexity of the issues raised in response to the draft.
A separate bill is before the New South Wales parliament. The Electricity Infrastructure Investment Amendment Bill 2026 was introduced on 5 August. It would let the minister declare access schemes over connections capable of carrying 5MW or more, six times below the level Transgrid's policy starts at. Transgrid's policy states that it does not apply to access rights under the Electricity Infrastructure Investment Act 2020 NSW. The bill sits at second reading in the Legislative Assembly.
Six criteria, from planning consent to a signed guarantee
The three-month clock runs on permits, construction, land, long-lead equipment and financing. The sixth criterion comes earlier: Transgrid will not execute a conditional connection agreement until it has accepted a complete connection application for review under Chapter 5 of the rules.
Criterion | What Transgrid requires | Who decides it |
|---|---|---|
Permits | A development consent approved at a capacity matching the connection agreement, plus FIRB approval where required | The NSW planning department, and FIRB where required |
Construction | Construction contracts awarded, or an executed underwriting agreement for early or preliminary works | The developer |
Land | Ownership, purchase, settlement, acquisition or lease of the site | The developer |
Long lead equipment | Executed procurement contracts with the equipment manufacturers, or an underwriting agreement specifying the grid connection equipment | The developer |
Financing | A signed parent company guarantee or bank guarantee, or the developer's board approval to proceed | The developer |
Performance standards | A complete connection application accepted for review, lodged before a conditional agreement is executed | Transgrid |
Source: Transgrid, Network Capacity Allocation Policy, Table 1, effective 14 August 2026.
An approval from the developer's own board satisfies the financing criterion, in place of a guarantee from a parent company or a bank. Performance standards run on a separate clock: AEMO and Transgrid have to accept them within six months of a conditional agreement being signed, or the agreement may be terminated.
Transgrid put a list of charges to the New South Wales parliament in March. Its submission to the data centre inquiry sought "application fees to discourage speculative connection enquiries", "long-term network service agreements including take-or-pay charges", "prudential security requirements", "exit fees where projects do not proceed" and "acceleration fees". Chief executive Brett Redman went further in June, asking for large users to pay for their full connection capacity whether or not they draw it. Every one of those would take a decision by the state.
The committee received submissions from operators, networks and councils and reports by 30 September.
New South Wales commits to 75 days on a compliant application
The guidelines New South Wales published on 17 August commit the state to "the development application assessment process taking no longer than 75 days in state government hands". They also commit it to issuing Secretary's Environmental Assessment Requirements, the list of matters a project has to address before it writes its environmental impact statement, within two months. Both promises apply to projects that address the principles in the guidelines. A State Significant Development application, the class of large project the state assesses rather than a council, is also open for public comment for at least 28 days in most cases.
The department publishes end-to-end timing for one class of project, housing. As at 31 July 2026 housing was running at 234 days from lodgement to decision against a 275-day goal, and 94 days in government hands against a 90-day goal. Housing is a different class of application, and it is the closest published measure of whether the department meets its own targets.
Transgrid screens for progress before the clock starts. It executes a conditional connection agreement only where it has accepted a complete connection application and the developer can demonstrate "meaningful progress against the first five criteria recorded in Table 1", so the three months begins with a project already well advanced.
A data centre can still be approved for less power than its connection agreement covers. When that happens the developer has to go back to the planning department and have the consent varied, and the variation has to be granted inside the same three months. A variation is a fresh planning application, and it can be put out for public comment.
Transgrid has 10GW of enquiries within 12km of Sydney West
Transgrid has "received data centre connection enquiries totaling more than 10 GW within a 12 km radius of Sydney West" since late 2024, by its own count. It says capacity to connect in the Sydney basin is largely exhausted. In June it wrote to developers that the western Sydney 330kV network will be largely full by 2033, and pointed them toward the Hunter and the Riverina, where new transmission is being built.
New South Wales publishes a larger figure, and it covers the whole state. Its consultation paper records that as at July 2026, data centres are seeking network connections totalling up to 28GW, with around 13GW in advanced discussions. AEMO's transmission connection process counted 9GW across 17 projects at the end of June, and New South Wales accounted for 52% of that. The guidelines cite an Oxford Economics estimate that six of every seven megawatts of connection requests may be phantom demand.
Transgrid allocates capacity at the moment a connection agreement is signed. It had contracted about 1.5GW in Western Sydney before the policy existed, with about 8GW more in advanced discussions as at June. Every agreement signed from 14 August comes with the three-month condition.
New South Wales would require a bond of A$30,000 a megawatt
The consultation the state opened on 17 August contains ten proposals and closes at 5pm on 14 September 2026, with a webinar on 24 August. It would charge an entry bond of A$30,000 per megawatt of requested capacity, forfeitable where an applicant fails to supply information in time.
A Major Network Upgrade Fee would apply on top, at a default A$200,000 per megawatt around Sydney, Newcastle and Wollongong and A$100,000 elsewhere. It would fall due immediately before a connection agreement is executed, at a rate set by the Consumer Trustee, the statutory office that manages the state's electricity infrastructure contracts. Applicants would also have to disclose whether they are pursuing a substantially similar application elsewhere in Australia.
The paper would create a large load infrastructure access scheme as well, extending the arrangements used to manage generation connections in renewable energy zones, the designated regions where new wind and solar plug in. Developers "would compete for access rights on a range of social, technical and financial performance criteria", including energy and water efficiency, demand flexibility and willingness to pay higher connection fees. The state would rank applicants against each other. Transgrid ranks each applicant against a checklist.
For scale on what the money buys, distributors have costed a comparable Victorian connection at between A$20.5 million and A$86.8 million across nine scenarios, at the distribution level rather than transmission.
What to watch
Submissions. The consultation closes at 5pm on 14 September 2026, and the departmental webinar is on 24 August.
Released capacity. The policy states that a developer "may lose its transmission capacity allocation". It does not say who gets that capacity next.
The bill. The Electricity Infrastructure Investment Amendment Bill 2026 has to pass before the access scheme regulations can be made. It sits at second reading in the Legislative Assembly.
The 30MW standard. The AEMC's final determination on lifting the large-load threshold from 5MW to 30MW is due on 29 October 2026.
The first conversions. Agreements signed from 14 August start their three months from the date of signature, and no public register shows them.