AEMO data centres add 5.4 GW of connection requests as NEM spot prices sag
Demand-side growth is arriving unevenly across the NEM, complicating supply forecasts even as wholesale spot prices averaged $74/MWh in Q2.
Wholesale spot prices across Australia's National Electricity Market averaged $74/MWh in the second quarter, down $66/MWh from the same period a year earlier, and AEMO's own reporting shows one of the quieter demand quarters on record for the country's main grid. The 47 percent decline was broad-based, with South Australia the only region to register material price volatility.5
That price softness is colliding with a demand pipeline that is highly concentrated rather than evenly spread. AEMO chief executive comments from June (2026-06-11) revealed average data centre demand through Q1 was nearly 600 MW, with 11 data centres totalling 5.4 GW of ultimate load working through transmission network connection agreements.3
The map of where that load lands is not the map of where the generation is being built. Most of the 5.4 GW of data centre connection requests is clustering around existing transmission hubs and urban load centres, while the utility-scale wind and solar pipeline is predominantly being developed in regions where grid congestion and curtailment have already become routine.3
AEMO has flagged that data sharing, connection arrangements and planning frameworks will all need work as the demand side becomes a larger share of the planning question. The Electricity Statement of Opportunities and Gas Statement of Opportunities have both increased their treatment of demand-side resources over time, but the primary question remains whether the connection process can keep pace.3
Behind-the-meter batteries are one answer, and they are scaling faster than many market participants expected. AEMO now reports 2.8 GW of UPRR behind-the-meter batteries responding to prices without central dispatch, equivalent to the capacity of Origin Energy's Eraring coal plant.2
That 2.8 GW of price-responsive storage changes how demand responds to scarcity pricing. When supply tightens and prices spike, these batteries can pull load or push energy depending on their state of charge, compressing the depth and duration of high-price events in ways the centrally dispatched fleet alone would not deliver.2
Demand response trials could add more than 1 GW of additional grid capacity through mechanisms that do not require AEMO rule changes. Proponents argue the trials will prove there is no reason to keep these loads out of the market, providing a case study to support a broader rule change request.4
The intra-day volatility picture is shifting alongside the demand mix. WattClarity analysis from June (2026-06-03) noted intra-day volatility appears to be compressing in some periods while inter-day and event-driven volatility becomes more important — a pattern consistent with a grid that has large amounts of solar during daylight hours and price-responsive storage flattening the evening ramp.2
The modelling community is trying to capture these dynamics. One open-source CSIRO tool, the Simple Electricity Model, simulates about 25 million half-hourly regional prices per run, with storage charging and discharging decided by the model rather than assumed, allowing scarcity prices to emerge from demand-response and value-of-lost-load tiers when supply is tight.1
The base case in that modelling sees the fleet end up with 50 GW of wind, 49 GW of solar and 45 GW of batteries, plus about 10 GW of gas. The high-cost-of-capital sensitivity builds 62 GW of batteries and only 7 GW of gas. There is plenty of building to do yet.1
East coast gas prices fell to their lowest level since Q2 2021, averaging $9.08 per gigajoule in the quarter, driven by lower domestic demand. Wallumbilla gas last traded at A$10.90/GJ at Monday's close (2026-09-07), still well below the peaks seen over the past two years.5
The spot price signal for Q2 was unambiguous: the market is not tight on average. But the average hides the concentration risk. Five gigawatts of data centre load connecting to a handful of nodes will stress the grid very differently than the same volume dispersed across regions, and the current spot price does not yet reflect that future.5
Queensland's wind fleet rose 80 percent to an all-time high of 842 MW average generation in Q2.5 If that fleet can keep displacing gas during shoulder seasons while the connection queue for new load backs up, it buys time. But if data centre connections slip past their target dates, the demand side of the supply-demand equation will arrive later than the price response currently suggests — and the grid's quiet quarter will have been a poor guide to what comes next.