{"id":750291,"date":"2026-06-21T06:32:18","date_gmt":"2026-06-21T06:32:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/750291\/"},"modified":"2026-06-21T06:32:18","modified_gmt":"2026-06-21T06:32:18","slug":"data-centres-victoria-how-ai-surge-is-complicating-the-states-renewable-energy-switch","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/750291\/","title":{"rendered":"Data centres Victoria: How AI surge is complicating the state\u2019s renewable energy switch"},"content":{"rendered":"

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Victoria\u2019s energy planners are rewriting long-term electricity forecasts to account for an unprecedented boom in energy-hungry data centres as they prepare a new 25-year blueprint for the state electricity grid.<\/p>\n

Draft guidelines for VicGrid\u2019s 2027 Victorian Transmission Plan reveal that the state will, for the first time, explicitly model data centre growth<\/a> in its forecasting, guiding investment in the state\u2019s electricity system over the next three decades.<\/p>\n

\"OverOver the past 12 months, private companies and individuals have sunk almost $300 billion into new buildings, equipment, machinery and homes in NSW and Victoria.Marija Ercegovac<\/p>\n

Planners also warn that Victoria\u2019s transition to renewable energy<\/a> could face a multi-year delay driven by fading community acceptance, critical infrastructure bottlenecks<\/a> and unco-ordinated data centre growth<\/a>, modelling a scenario where the state must lean heavily on gas to keep the lights on.<\/p>\n

Unlike the 2025 plan, the 2027 blueprint will extend to 25 years as Victoria prepares for the closure of its remaining coal-fired station<\/a> by 2035 and amid increasing uncertainty over how quickly electricity demand will grow.<\/p>\n

The draft plan developed by VicGrid, the state government body tasked with restructuring Victoria\u2019s electricity grid, says electricity demand forecasts must be updated to reflect data centre development amid a rapidly evolving energy market.<\/p>\n

Related Article\"The<\/a><\/p>\n

\u201cVicGrid will develop its own forecast for data centre demand in Victoria based on AEMO forecasts, connections enquiry data and other sources to ensure the VTP is designed with the most up-to-date information,\u201d the guidelines state.<\/p>\n

The shift comes as Melbourne accelerates to become the nation\u2019s fastest-growing digital infrastructure market, threatening to collide directly with the state\u2019s tight energy deadlines.<\/p>\n

The Allan government has vowed to aggressively court major tech players to the state to build the electricity and water-intensive warehouses, and is relying on the resulting construction boom to drive economic growth in the state.<\/p>\n

Over the next 12 months, the agency will develop new electricity demand forecasts and test a range of scenarios to determine what generation, storage and transmission infrastructure will be required to keep the system reliable.<\/p>\n

The draft guidelines consider three core scenarios for Victoria\u2019s energy future. The first assumes the state\u2019s energy transition proceeds largely as planned, with renewable energy, storage and offshore wind targets met alongside steady growth in electricity demand.<\/p>\n

\"TheThe Golden Plains wind farm in Victoria.Eamon Gallagher<\/p>\n

The second considers a faster transition, with higher electricity demand and stronger growth in data centres.<\/p>\n

The third explores a more difficult pathway, with delays to major energy projects combined with uncoordinated growth in electricity demand from data centres, concentrated in metropolitan Melbourne.<\/p>\n

Under that scenario, major power line projects, renewable energy targets and the rollout of offshore wind miss their deadlines by two years. If this occurs, the state will face \u201cincreased gas supply and augmentation challenges\u201d to keep the lights on.<\/p>\n

The planning process will also test whether Victoria\u2019s recently declared renewable energy zones are sufficient to meet the state\u2019s long-term energy needs.<\/p>\n

The Allan government this month formally declared five renewable energy zones across regional Victoria and a Gippsland shoreline zone to support offshore wind, covering about 1.8 million hectares in total.<\/p>\n

VicGrid Chief Executive Alistair Parker said he welcomed the first five zones, which would improve coordination of solar, wind and battery projects and reduce the need for unnecessary transmission infrastructure.<\/p>\n

Related Article\"Melbourne<\/a><\/p>\n

\u201cVictoria\u2019s coal-fired power stations are due to close over the next 10 years and a significant amount of new renewable energy development is needed to make sure we can meet increasing demand for electricity,\u201d he said.<\/p>\n

The Australian Energy Market Operator (AEMO) has a long-term pipeline of Victorian connection requests totalling 18 gigawatts \u2013 double the state\u2019s current maximum demand \u2013 though how many projects proceed remains highly uncertain.<\/p>\n

The operator\u2019s latest quarterly National Electricity Market report said there were 1.5 gigawatts of data centre capacity at the application stage and another 0.7 gigawatts approved or under construction.<\/p>\n

The prospect of expanding renewable energy development could heighten tensions in regional Victoria, where new high-voltage, above-ground transmission lines have become a major point of community opposition<\/a>. Transmission lines are the infrastructure required to connect far-flung renewable energy zones to major cities.<\/p>\n

The expanding transmission build-out has become a political flashpoint ahead of November\u2019s state election.<\/p>\n

The Coalition has pledged to review Victoria\u2019s transmission plan if elected, arguing more generation should be located closer to where demand is concentrated in Melbourne.<\/p>\n

\"ProtestProtest signs against the Western Renewables Link can be seen along its proposed route.Justin McManus<\/p>\n

Opposition energy spokesman David Davis said rooftop solar and batteries on commercial and industrial buildings could reduce the need for major transmission projects across regional Victoria.<\/p>\n

\u201cWe will support these developments, which will minimise land use conflict and deliver clean power where it\u2019s needed,\u201d he said.<\/p>\n

The Coalition has also committed to pausing contentious transmission projects, including VNI West, while repealing laws that give planners accelerated land-access powers. This comes after years of opposition to major transmission projects from landholders and the farming community.<\/p>\n

Related Article\"<\/a><\/p>\n

One Nation has targeted the transmission rollout amid its surge in support in Victoria, vowing to halt construction of new transmission lines for renewable energy projects, claiming farmers were shouldering the burden of the \u201cnet zero\u201d transition.<\/p>\n

The VicGrid report acknowledged the risk of declining community support for renewable energy infrastructure, with the guidelines warning that changing levels of \u201csocial licence\u201d could affect the timing and delivery of new generation and transmission projects.<\/p>\n

A spokesperson for Energy Minister Lily D\u2019Ambrosio said the government was working with the Commonwealth to ensure data centres don\u2019t compromise grid stability and was investing in renewable energy generation to prevent additional costs for households and businesses.<\/p>\n

\u201cJess Wilson\u2019s plan to delay transmission will add up to $1700 a year to power bills and expose Victorian households to blackouts,\u201d she said.<\/p>\n

\u201cOnly Labor will build the renewable energy projects needed to keep the lights on and maintain the lowest electricity prices in the country.\u201d<\/p>\n

Start the day with a summary of the day\u2019s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter<\/a>. <\/p>\n

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\"DaniellaDaniella White<\/a> is a state political reporter for The Age. Contact her at da.white@nine.com.auConnect via X<\/a> or email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Save You have reached your maximum number of saved items. Remove items from your saved list to add…\n","protected":false},"author":2,"featured_media":721711,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-750291","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/750291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=750291"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/750291\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/721711"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=750291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=750291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=750291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}