Data Centres in Australia - Where to Build One and Why

Data centres in Australia used about 5 terawatt hours of electricity in the year to June 2026, and the Australian Energy Market Operator (AEMO) forecasts about 34 terawatt hours a decade later. Part 1 of 4 sets the power, the grid queue, electricity prices, planning rules and fibre for each capital side by side. It asks where a new A$1 billion data centre could be built.

Data centres in Australia are mostly in Sydney and Melbourne, and they used about 5 terawatt hours of electricity in 2025-26. The Australian Energy Market Operator (AEMO) forecasts close to seven times that by 2035-36. Network companies in the eastern states have been asked to connect 67 gigawatts of new data centre capacity, about thirty times the 2.2 gigawatts connected today on Samso's arithmetic.

This piece takes a single question, where a new A$1 billion data centre could be built in Australia, and answers it with public data. It compares Sydney, Melbourne, Brisbane and Perth, with Adelaide, Hobart and regional sites alongside. The measures are current demand, forecast demand, the queue for a grid connection, the price of electricity, and the planning and fibre rules. Section 10.00 is Samso's own reading of the evidence.

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READING THE SERIES

The Business of Data Centres runs in four parts.

Part 1, this piece. Where in Australia a new A$1 billion data centre could be built, comparing power, the grid queue, electricity prices, planning and fibre.

Part 2. The economics of a megawatt. What a data centre costs to build and run, and what it earns, using the figures the listed operators publish.

Part 3. The listed operators, NEXTDC, Macquarie Technology, DigiCo, Goodman and Infratil through CDC, and how their business models compare.

Part 4. The ASX companies with data centre land, power or equipment projects, tested against the steps a project must pass before it earns revenue.

Earlier Samso Insights on the theme cover ASX data centre stocks, ASX AI stocks and five ASX small caps with AI data centre land.

A NOTE ON THE VOCABULARY AND THE SOURCES

Technical terms are explained in plain English where they first appear, and all of them are collected in one box at the back, above the references. Every source carries an identifier, [R1] to [R20], and that identifier appears in the body text at the point the source is used, so any figure can be traced to the document it came from.

Where Samso does its own arithmetic, the piece says so and shows the sum. Where a source's documents give two different figures for the same thing, both are quoted as published, with the document each came from. Where the piece builds a model from released data rather than repeating a source, it says so at that point and labels it as a theoretical model. A model is not a prediction. All figures carry their own dates. This piece quotes no share prices.

WHAT THIS PIECE COVERS

1.00 WHAT A$1 BILLION BUYS IN AN AUSTRALIAN DATA CENTRE

About 59 to 77 MW of IT load, before the land

2.00 HOW MUCH POWER AUSTRALIA'S DATA CENTRES USE TODAY

About 165 sites, 5 terawatt hours a year, and most of it in Sydney

3.00 WHERE AEMO FORECASTS THE NEXT DECADE OF DEMAND

From 5 TWh to about 34 TWh, and still mostly New South Wales and Victoria

4.00 THE QUEUE FOR A GRID CONNECTION

67 GW requested against 2.2 GW connected

5.00 WHAT ELECTRICITY COSTS IN EACH STATE

Two years of wholesale prices, from Victoria at the low end to New South Wales at the high end

6.00 WHETHER THE GRID CAN SUPPLY NEW DATA CENTRES

Reliability gaps from 2030-31, and new rules that make data centres bring their own power

7.00 PLANNING RULES IN NEW SOUTH WALES AND VICTORIA

The NSW guidelines and the Victorian statement

8.00 FIBRE AND SUBMARINE CABLES

Which cities connect to each other and to Asia

9.00 THE CANDIDATE LOCATIONS SIDE BY SIDE

Sydney, Melbourne, Brisbane, Perth and the regions in one table

10.00 WHERE SAMSO WOULD PUT THE A$1 BILLION

Samso's reading of the evidence

1.00 — WHAT A$1 BILLION BUYS IN AN AUSTRALIAN DATA CENTRE

About 59 to 77 MW of IT load, before the land

A data centre is a building that houses computer servers and keeps them powered and cool around the clock. Its size is measured in megawatts (MW) of IT load. That is the electrical power the servers themselves can draw, not the power used by the cooling plant, the lighting or the offices.

The clearest published guide to what an Australian data centre costs to build comes from CDC Data Centres, the operator in which Infratil (ASX: IFT) holds 49.7 per cent. In its results presentation for the year to 31 March 2026, Infratil said CDC's capital spending per MW of IT capacity varies by site, "with current $/MW averages in the mid-teens (excluding land)" ^[R10]. The slide does not print a currency, but the other CDC figures on it are in Australian dollars. Samso reads it as roughly A$13 million to A$17 million for each megawatt of IT load, with the land bought separately.

On that basis A$1 billion builds about 59 MW of IT load at A$17 million a megawatt, about 67 MW at A$15 million, and about 77 MW at A$13 million. This is Samso's arithmetic on CDC's description, and the range of A$13 million to A$17 million is Samso's reading of "mid-teens". CDC did not publish a range. The figure leaves out the land, and it describes CDC's own sites, which are large purpose-built campuses.

For scale, Macquarie Technology Group (ASX: MAQ) is building IC3 SuperWest at its Macquarie Park campus in Sydney with a design capacity of 47 MW ^[R13]. PLATE 01 shows the building. NEXTDC (ASX: NXT) had 288 MW of built capacity across its whole portfolio at 30 June 2026 ^[R12]. So A$1 billion buys one large building or the first stages of a campus, well short of a portfolio.

The rest of this piece asks where in Australia that building could go. Section 2.00 starts with how much power data centres use today. Part 2 of the series takes the same A$1 billion and asks whether it can earn a return. FIG. 01 marks the places discussed.

2.00 — HOW MUCH POWER AUSTRALIA'S DATA CENTRES USE TODAY

About 165 sites, 5 terawatt hours a year, and most of it in Sydney

The Australian Energy Market Operator (AEMO) runs the electricity grid and wholesale market for the eastern and south-eastern states, the National Electricity Market (NEM). It also runs Western Australia's separate system around Perth, the South West Interconnected System (SWIS), where trading happens on the Wholesale Electricity Market (WEM). The two are not connected. A data centre in Perth and one in Sydney draw power from different grids, each with its own prices and its own forecasts.

AEMO published its 2026 Electricity Statement of Opportunities (ESOO) for the NEM on 25 August 2026 ^[R1]. The ESOO is AEMO's ten-year outlook for electricity demand and supply. It also published a separate explainer on data centres ^[R2]. AEMO counts around 165 data centres in the NEM. They used approximately 5 terawatt hours (TWh) of electricity in the 2025-26 financial year. A terawatt hour is a million megawatt hours. Five TWh is about 2.8 per cent of all the electricity supplied through the NEM grid that year.

The demand is concentrated. In 2025-26, 66 per cent of data centre electricity in the NEM was used in New South Wales and 30 per cent in Victoria. South Australia used 2 per cent, Queensland 1 per cent and Tasmania less than 1 per cent ^[R2]. FIG. 02 shows the history. Average monthly demand from NEM data centres rose from nearly 200 MW in January 2018 to more than 700 MW in June 2026, and the light blue band for New South Wales makes up most of it.

Data centres use much less power than their connections allow. AEMO estimates that operating NEM data centres had 2.2 gigawatts (GW) of maximum connection capacity at the start of 2026. A gigawatt is 1,000 MW. Actual demand in the March quarter of 2026 was about 27 per cent of that capacity ^[R1]. The load is also very flat. AEMO puts the load factor near 90 per cent, which means the sites draw close to the same power at 3am as at 3pm.

AEMO describes the 27 per cent as relatively low. Operators told it they expect a new facility to take five to ten years to ramp up to full use. AEMO expects a mature fleet to average 45 to 51 per cent of its connection capacity, allowing for spare equipment held in reserve and for the mix of customers ^[R1].

Western Australia is much smaller. AEMO's 2026 WEM ESOO is the first to report data centres as their own category. It puts SWIS data centre consumption at 0.146 TWh in 2025-26 ^{[R4] [R5]}. On Samso's arithmetic that is about 3 per cent of the NEM figure.

3.00 — WHERE AEMO FORECASTS THE NEXT DECADE OF DEMAND

From 5 TWh to about 34 TWh, and still mostly New South Wales and Victoria

AEMO's central forecast is called Step Change. Under it, NEM data centre consumption roughly triples to about 15 TWh by 2029-30 and grows to about 34 TWh by 2035-36 ^[R1]. At that point data centres would use about 13 per cent of all electricity supplied through the NEM. AEMO expects growth to taper after that. TABLE 01 gives the regional split from AEMO's results workbook ^[R3], and FIG. 03 shows the same forecast as AEMO drew it.

New South Wales and Victoria carry almost all of the forecast growth. South Australia rises late, from 0.15 TWh in 2029-30 to 2.5 TWh in 2035-36. Queensland stays below 0.1 TWh in every year. AEMO added a note to that figure. Since the forecast was finalised, it has seen more interest in Queensland than the numbers show ^[R1]. So the Queensland line reflects what AEMO knew when the forecast was finalised. The next ESOO will show how much of that interest turns into projects.

The forecast is itself an average of two methods. One adds up known projects and weights each by its chance of being built. The other starts from the economy and the expected demand for digital services, including Australia as a regional hub for Asia. AEMO also ran a High Data Centre Growth sensitivity, in which NEM data centres use about 52 TWh by 2035-36, about 56 per cent more than Step Change ^[R1]. AEMO's lower scenario, Slower Growth, has data centre demand rising more slowly.

The WEM forecast for Perth is more cautious. AEMO's Expected scenario has SWIS data centres using 0.368 TWh in 2029-30 and 0.750 TWh in 2035-36 ^[R5]. The overview at the start of the WEM ESOO's demand chapter describes the 2035-36 figure as approximately 0.8 TWh, and the detailed discussion says less than 0.8 TWh ^[R4]. AEMO calls the forecast conservative because only a few WA projects are well advanced. It says one or two material projects would move the outlook from its Expected case to its High case. FIG. 04 is AEMO's chart of electricity delivered through the SWIS by category, where data centres are the thin yellow band.

A single large project would change the WA picture. Section 1.00 put the A$1 billion budget at about 67 MW of IT load. Suppose such a site ran at half its IT load all year, and used 1.3 units of total power for every unit used by the servers. It would draw about 381,000 megawatt hours a year. That is 0.38 TWh, or about half of AEMO's entire 2035-36 forecast for SWIS data centres. This is Samso's arithmetic, 67 MW times 0.5 times 1.3 times 8,760 hours. The ratio of 1.3 is a common design target, explained in section 7.00. In the NEM the same site would add about 1 per cent to AEMO's 2035-36 forecast.

4.00 — THE QUEUE FOR A GRID CONNECTION

67 GW requested against 2.2 GW connected

A data centre needs a connection agreement with the company that owns the local poles and wires. That is a distribution network for smaller sites, or a transmission network for the largest ones. AEMO calls both network service providers (NSPs). The NSPs report the projects in their queues to AEMO, sorted by how far each has got.

The queue grew fast in a year. NSPs told AEMO of 225 data centre projects at some stage of connection in 2026, with combined proposed connection capacity of 67 GW, up from 38 GW in the 2025 ESOO ^[R1]. For comparison, the data centres actually operating in the NEM had 2.2 GW of connection capacity. Their average monthly demand passed 700 MW only in June 2026.

Many projects in the queue do not proceed. About 36 per cent of the projects on AEMO's 2025 list have since been cancelled. AEMO says projects were cancelled at every stage, including more than 30 per cent of projects cancelled that NSPs had previously classed as committed ^[R1]. A committed project usually has a signed connection agreement. The executive summary of the ESOO puts it more widely. More than 40 per cent of data centre projects since 2025 either dropped out or went backwards in connection status.

Samso's September 2026 Insight on ASX data centre stocks covered the earlier Oxford Economics estimate that six in every seven megawatts of connection requests are phantom demand ^[R18]. Phantom demand means requests for capacity that is never built, often because one project applies in several places. The NSW Government's data centre guidelines, published in August 2026, repeat that figure and add a second one ^[R7]. Energy utilities told the NSW Government that about 20 per cent of the data centre applications in their queues are likely to proceed.

FIG. 05 shows the 2026 queue by region and stage, as AEMO drew it. The stages run from pre-feasibility, the label AEMO's data uses for the earliest proposals, through enquiry, the first approach to the network, then application and committed, to operating. Samso totalled AEMO's workbook figures for each region ^[R3]. New South Wales has 29.9 GW waiting to connect on top of 1.3 GW already operating. Victoria has 21.9 GW waiting on top of 0.8 GW operating. South Australia has 14.6 GW waiting, almost all at the enquiry or pre-feasibility stage. Queensland had no data centre projects in its queue at the time, only 0.02 GW of operating sites, which matches the note on Queensland in section 3.00.

For an A$1 billion project the queue changes the order of the work. A site with land and a building but no connection date cannot sell capacity to a tenant. The connection is the scarce part. It is also the part an outside investor can test, because a connection agreement either exists or does not, and the stage can be checked against what the network reports. The connection also has to be larger than the IT load. The 67 MW site from section 1.00, using 1.3 units of total power for each unit used by the servers, would draw about 87 MW at full load. This is Samso's arithmetic.

NEXTDC showed on 21 October 2026 what a delay to more grid supply can cost. Jemena, which runs the electricity network in that part of Melbourne, had suspended parts of its works to increase the supply to NEXTDC's M3 data centre. NEXTDC said Jemena put the suspension down to community and stakeholder opposition to the works. That opposition raised safety concerns and cut off access to work sites, and the local council has not given its consent while consultation continues. Jemena does not expect to restart the works before February 2027. NEXTDC now expects the next increase in grid supply to M3 in the 2027-28 financial year ^[R20].

The affected customer had signed, and some of its capacity was already billing. NEXTDC removed the affected M3 contracts from its guidance for the 2026-27 financial year. Its August guidance had included about A$140 million from them in net revenue, which is total revenue less direct costs. It had included the same again in underlying EBITDA, which is earnings before interest, tax, depreciation and amortisation. NEXTDC also put all new development projects and land acquisitions on hold. It said its actual results for the year will still include some contribution from these contracts, but it cannot yet estimate how much ^[R20].

5.00 — WHAT ELECTRICITY COSTS IN EACH STATE

Two years of wholesale prices, from Victoria at the low end to New South Wales at the high end

Electricity is a large running cost for a data centre. How much of it the operator carries depends on the contract. Many operators pass the power bill through to the tenant. Part 2 of the series deals with who pays. This section shows what the power costs in each place.

The wholesale spot price is the price generators are paid in the NEM. It is set every five minutes. AEMO publishes the quarterly average for each NEM region in its Quarterly Energy Dynamics reports ^[R6]. FIG. 06 charts the eight quarters from July 2024 to June 2026. The NEM figures add AEMO's energy component, the average price capped at A$300 per megawatt hour, to its cap return. The cap return is the extra added by the intervals when the price went above A$300. The WEM line is AEMO's average energy price for Western Australia, which is set under different market rules.

Over the eight quarters, Victoria averaged about A$70 per megawatt hour and New South Wales about A$103. Queensland averaged about A$87, South Australia about A$91 and Tasmania about A$94. These are Samso's simple averages of AEMO's quarterly figures. Over the most recent four quarters, to June 2026, prices were lower and Victoria was still the cheapest. Victoria averaged about A$53, Queensland about A$65, New South Wales and Tasmania about A$78 each, and South Australia about A$79.

The WEM energy price averaged about A$90 over the eight quarters and reached A$117.87 in the June 2026 quarter, which AEMO described as a record high for the WEM ^[R6]. WA users also pay separately for Reserve Capacity, which AEMO put at A$40.49 per megawatt hour in the June 2026 quarter. So the WEM energy price understates the WA wholesale cost against the NEM figures ^[R6].

To put the gap in dollars, take the same 67 MW site running at half its IT load with a ratio of 1.3, which uses about 381,000 megawatt hours a year. At the eight-quarter average spot price that costs about A$39 million a year in New South Wales and about A$27 million in Victoria. This is Samso's arithmetic and it uses wholesale spot prices only. A real data centre pays network charges, a retailer's margin and the cost of hedging contracts on top of the spot price. Many large users also fix their price in advance under a power purchase agreement (PPA), a long-term contract to buy electricity from a particular generator. So the spot price is a good guide to the difference between states. What a site actually pays depends on its contracts.

Victoria's lower prices have not held in every quarter. In the September quarter of 2024 Victoria was dearer than Queensland, and in the June quarter of 2025 it averaged about A$138, higher than Queensland's A$121. A site chosen for cheap power is relying on the long-run average.

6.00 — WHETHER THE GRID CAN SUPPLY NEW DATA CENTRES

Reliability gaps from 2030-31, and new rules that make data centres bring their own power

The ESOO's main job is to test whether there will be enough supply to meet demand to AEMO's reliability standard. It runs that test two ways ^[R1]. The first counts only generation and storage projects that are committed or anticipated. AEMO classes a project as committed when it has met its tests on land, finance, planning, contracts and construction, and as anticipated when it is well advanced on them. This first test also assumes projects arrive late by the margins seen in recent years. On that basis the standard is forecast to be breached from 2030-31 in New South Wales and Victoria, from 2031-32 in South Australia, from 2032-33 in Queensland and from 2033-34 in Tasmania.

The second assessment adds projects backed by government schemes and the transmission lines AEMO has marked as actionable. On that basis reliability holds until 2033-34 in New South Wales, South Australia and Victoria ^[R1].

AEMO also tested what higher data centre growth does to the grid. If the 2035-36 Step Change level of data centre demand arrives four years early, in 2031-32, reliability can still hold. That depends on the supported generation and transmission being delivered on time and no coal plant closing early. From 2032-33 more investment would be needed, particularly in New South Wales, Victoria and South Australia ^[R1]. FIG. 07 is AEMO's map of the transmission projects that underpin those assessments.

Governments are now writing rules that ask data centres to supply more of their own power. Samso's September Insight set out the federal proposals and the energy ministers' response ^[R18]. AEMO's ESOO notes that the Federal Government announced proposals on 15 July 2026 for connection requirements for future large data centres, including that new large data centres underwrite their own power supply ^[R1].

In July 2026 the Australian Energy Market Commission (AEMC), which writes the electricity market rules, advised energy ministers on ways to make data centres offset their demand. It made four recommendations ^[R1]. The first is to drive new renewables through the Renewable Electricity Guarantee of Origin scheme. The second is a data centre contract obligation. The third is market registration requirements. The fourth is to support demand flexibility and co-location with generation through connection agreements.

The NSW guidelines turn the same idea into numbers ^[R7]. A data centre is expected to sign PPAs and storage agreements for new renewable generation in NSW. At least 40 per cent of the contracted energy is to come from wind. The storage is to equal at least 25 per cent of the generation capacity for four hours. From the fourth year of operation the contracted energy is to match the site's average annual demand. The agreements run for at least ten years and must be for projects not yet at a final investment decision, so that the supply is new. A site is also expected to be able to cut its draw from the grid by 25 per cent of its average load for up to two hours when the grid is under strain, without using its diesel generators.

For the A$1 billion question these rules change the budget. A site in New South Wales that follows the guidelines will need contracted generation and storage in addition to the building. A site anywhere in the NEM may face the same under the federal proposal once it is settled. The guidelines also give a location signal. Data centres outside what the NSW Government calls the Sydney Ring are expected to have smaller contribution obligations, because many locations there have more spare grid capacity. Elsewhere the guidelines point to former coal-fired power station sites, where the network has spare capacity, and to Renewable Energy Zones, which are likely to need fewer upgrades ^[R7].

Perth has a timing question of its own. The WEM ESOO forecasts that capacity from existing and committed projects meets the Peak Reserve Capacity Target, AEMO's measure of the peak capacity the SWIS needs, until 2028-29, with a shortfall from 2029-30. If the 661 MW of anticipated projects arrive on time, capacity is forecast to be sufficient through 2030-31 ^[R4]. A large data centre arriving in Perth in that window adds to a system that is already forecast to need new capacity.

7.00 — PLANNING RULES IN NEW SOUTH WALES AND VICTORIA

The NSW guidelines and the Victorian statement

New South Wales has around 60 operating data centres, according to its guidelines. At July 2026 there were 19 data centre projects valued at A$50.3 billion in the state's planning pipeline for State Significant Development, the route used for the largest projects ^[R7]. For projects that meet its six principles, the NSW Government has committed to issue the Secretary's Environmental Assessment Requirements within two months. It will keep its part of the assessment to no more than 75 days. It has also set up a concierge team for data centre applicants and offers advice before a site is chosen. PLATE 02 shows one of the established Sydney sites, NEXTDC's Broadcast Way site at Artarmon, home of its S3 and S6 data centres ^[R11].

The guidelines set efficiency targets. Power usage effectiveness (PUE) is the total energy a site uses divided by the energy used by the servers. A PUE of 1.3 means that for every 1 MWh the servers use, the site uses another 0.3 MWh for cooling and everything else. Water usage effectiveness (WUE) is the litres of water used per kilowatt hour of IT energy. The NSW targets are a design PUE of 1.25 or less with a design WUE of 1.0 or less on drinking water. On non-potable water, such as recycled water, the WUE target is 1.6 or less. Alternatively a design PUE of 1.3 with a WUE of 0.44 or less is accepted. Recent environmental impact statements in NSW quoted PUEs between 1.15 and 1.4, averaging 1.3 ^[R7]. Sites using water-intensive cooling are expected to move to recycled water for all of it.

Victoria has set out where a data centre can and cannot go. The Minister for Planning's Statement of Expectation, dated 5 October 2026, applies to permit applications lodged on or after 23 September 2026 ^{[R8] [R9]}. Under it, data centres are prohibited in residential zones and within 150 metres of a building used for accommodation, education or a hospital. They are prohibited in Green Wedge, Rural Living and Rural Conservation zones.

In other rural zones a data centre is allowed only where one of three conditions is met. The land is within five kilometres of a powerline or substation of 66,000 volts or more. Or the site gets most of its power from directly connected renewable generation or batteries. Or it uses only recycled or non-potable water. EPA Victoria and WorkSafe Victoria are named as determining referral authorities. Every application must be publicly notified.

NEXTDC said on 21 October 2026 that the government's decision on a planning permit for Stages 6 and 7 of its M3 site in Melbourne was taking longer than it expected. The application was lodged in February 2026, before the new statement applies. The government enters caretaker conventions on 3 November 2026 ahead of the state election on 28 November. These are the rules under which a government defers major decisions before an election. NEXTDC does not now expect the decision until 2027 ^[R20].

Neither Queensland nor Western Australia had published statewide data centre planning rules like those of NSW and Victoria in the sources reviewed for this series. In those states a data centre goes through the normal planning system for a project of its size. In Perth, for example, the City of Swan has advertised for comment a proposed data centre at Hazelmere, which the Metro Outer Development Assessment Panel will decide because of the value of the works ^[R19]. Without a specific rule, approval there is decided site by site.

8.00 — FIBRE AND SUBMARINE CABLES

Which cities connect to each other and to Asia

Data has to reach the people and businesses that use it. The time it takes is called latency, and it rises with distance and with the number of hops along the way. A site for streaming, banking or artificial intelligence (AI) services that answer users in real time needs low latency to its customers. A site that trains AI models over weeks can be further away. Both need more than one physical fibre route, so that one cut cable does not take the site offline.

Submarine cables link Australia's capitals to each other and to the rest of the world. The SMAP cable built by SUBCO, a 5,000 km cable linking Sydney, Melbourne, Adelaide and Perth by sea, was declared ready for service on 25 June 2026 ^[R15]. SUBCO says it is the first submarine cable to land in both Melbourne and Adelaide. Perth also has the Australia Singapore Cable, which Vocus describes as a 4,600 km cable linking Perth to Singapore via Christmas Island and Indonesia ^[R16].

In Queensland the Japan Guam Australia South cable lands on the Sunshine Coast, north of Brisbane, according to the Sunshine Coast Council. The council says the Tabua cable, to Fiji and the United States, has also landed there ^[R17]. A Brisbane site using those cables needs a land route to the Sunshine Coast.

This list names cables confirmed in operator and government sources. It is not a full list of cable landings in Australia. Sydney's international cables were not reviewed for this piece, and the list says nothing about spare capacity on any cable. FIG. 08 shows how one operator, NEXTDC, has spread its sites, with campuses in every mainland capital and smaller sites in regional centres.

9.00 — THE CANDIDATE LOCATIONS SIDE BY SIDE

Sydney, Melbourne, Brisbane, Perth and the regions in one table

TABLE 02 sets the evidence from sections 2.00 to 8.00 next to each other. Every entry comes from the sources above. The last column gives the South Australian and Tasmanian figures, which mostly describe Adelaide and Hobart. It also gives the general rules for sites outside the capitals, such as former power station land or Renewable Energy Zones.

Sydney has the most existing data centre demand and the longest queue. It also has the highest average wholesale power price of the five NEM regions over the two years, a reliability gap forecast from 2030-31, and a planning regime that now asks for new generation to be contracted in addition to the building. Melbourne has the second-largest market, the lowest wholesale prices over two years, a large queue of its own, the same forecast reliability gap and the firmest planning limits on location.

Brisbane has the smallest NEM forecast today but a stated rise in interest, and its international cables land on the Sunshine Coast. Perth is on a different grid, with a small and cautious forecast, a cable to Singapore and a system forecast to need new capacity from 2029-30. Adelaide shows a different route, the expansion of an existing site. PLATE 03 is DigiCo Infrastructure REIT's ADL1, where DigiCo (ASX: DGT) describes a brownfield expansion "to deliver additional 15MW of IT Capacity (up from 8MW)" ^[R14]. Brownfield means land or buildings already in use. FIG. 01 marks all three plated sites.

10.00 — WHERE SAMSO WOULD PUT THE A$1 BILLION

Samso's reading of the evidence

This section is Samso's own reading of the data in sections 1.00 to 9.00. It is a theoretical exercise, not advice and not a forecast of what any company will do.

On this evidence the first thing to secure is the grid connection, ahead of the choice of city. In every NEM region with a queue it is many times larger than what is operating, and AEMO has watched more than a third of last year's projects drop out. An A$1 billion budget spent on a site without a firm connection date is spent on a building that may wait years for power. NEXTDC's M3 delay in October 2026 shows that even a large operator with an operating site and a signed customer can wait longer than planned for more power. The order that follows from the data is a connection agreement first, then a tenant, then construction.

On the evidence here, Samso would look first at Sydney or Melbourne. That is where the customers and the existing operators are, where AEMO's forecast growth is concentrated, and where a tenant is easiest to sign. Between the two, Melbourne has had the cheaper wholesale power over two years and New South Wales has published time limits for its part of the assessment.

The rules narrow the choice of site within each state. In Victoria, the statement rules out residential zones, land within 150 metres of homes, schools and hospitals, and rural land unless it is near a strong powerline, has its own renewable supply or uses only recycled water. In New South Wales, the guidelines expect smaller grid contributions from sites outside the Sydney Ring, and point to former coal-fired power station sites as places with spare network capacity. The trade-off in both states is the reliability gap AEMO forecasts from 2030-31 on its committed and anticipated basis, and the cost of contracting new generation to cover it.

Perth is a different case. Its forecast is small and AEMO calls it conservative, so a single large project would change it. It has a cable to Singapore. Against that, it has the smallest local market, the WEM's record June 2026 energy price, separate Reserve Capacity charges and a capacity shortfall forecast from 2029-30. Brisbane and the regional sites are at an earlier stage. Each needs a tenant who values what the site offers, such as cheaper land or nearby generation, more than distance from the main markets.

The forecasts may not arrive. Section 4.00 showed how much of the queue may never be built.

THE STANDING COUNTERARGUMENT

AEMO's own numbers show how uncertain data centre demand is. Section 4.00 set out how many projects have left the queue since 2025, and operating sites used about 27 per cent of their connection capacity in early 2026. AEMO's Slower Growth scenario has data centre demand rising more slowly than the central case. If AI spending slows, the first sign would be new halls filling more slowly than the five to ten years operators expect. Samso's Insight on the AI bubble looks at that spending.

The cost side can also move against a new building. The NSW guidelines expect contracted new generation and storage in addition to the site, and the federal proposal may ask the same across the NEM. On committed and anticipated projects, AEMO forecasts reliability gaps in New South Wales and Victoria from 2030-31. Victoria's cheaper power has not held in every quarter.

On that reading, a new A$1 billion building relies on demand that the existing fleet has not yet used. A site that is already built and partly let carries less of that risk.

SAMSO TAKE

Australia's data centre growth is often talked about in terms of land. AEMO's data shows that the queue for a grid connection matters as much. There are 225 projects asking for 67 GW, against 2.2 GW connected and running at a little over a quarter of that.

For an investor the useful question about any data centre announcement is where it is in that queue. Does it have a connection agreement, and with which network? Does it have a tenant, and is the agreement binding? Part 4 of this series applies those questions to the ASX projects. Before that, Part 2 asks what the A$1 billion earns once it is built.

If the scarce thing is a connection and a customer, how much of the value in a data centre company is in the land and the buildings, and how much is in the agreements?

THE VOCABULARY, IN PLAIN ENGLISH

MW of IT load

The electrical power a data centre's servers can draw, in megawatts. It is the usual measure of a data centre's size. It leaves out the power used for cooling and the rest of the building.

MWh, GWh and TWh

Amounts of electricity used over time. A megawatt hour is one megawatt for one hour. A gigawatt hour is 1,000 MWh and a terawatt hour is a million MWh.

GW

A gigawatt, 1,000 megawatts of power.

NEM

The National Electricity Market, the grid and wholesale market covering Queensland, New South Wales, the ACT, Victoria, South Australia and Tasmania.

SWIS and WEM

The South West Interconnected System is Western Australia's separate grid around Perth. The Wholesale Electricity Market is the market that runs on it.

ESOO

AEMO's Electricity Statement of Opportunities, a ten-year outlook for demand and supply, published each year for the NEM and for the WEM.

Step Change and Expected

The names of AEMO's central forecast scenarios for the NEM and the WEM.

Connection capacity

The most power a site's grid connection allows it to draw. A site usually uses much less on average.

Load factor

Average use as a share of peak use. Near 90 per cent means demand is almost the same all day.

Network service provider

The company that owns and runs the poles and wires a site connects to, either a distribution or a transmission network.

Pre-feasibility, enquiry, application, committed

Stages of a connection request, from the earliest proposals, to a first approach to the network, to a formal application, to a project that usually has a signed connection agreement.

Committed and anticipated projects

AEMO's labels for generation and storage projects. Committed projects have met its tests on land, finance, planning, contracts and construction. Anticipated projects are well advanced on them.

Phantom demand

Connection requests that are never built, often because one project applies in several places.

Spot price and cap return

The spot price is what generators are paid in the NEM, set every five minutes. The cap return is the part of the average that comes from the rare intervals when the price spikes above A$300 per MWh.

Reserve Capacity

A separate payment in Western Australia's market for having enough capacity available at peak times. WA users pay it on top of the energy price.

Power purchase agreement

A long-term contract to buy electricity from a particular generator at an agreed price.

Reliability standard

The level of supply AEMO must plan for. It allows no more than 0.002 per cent of demand to go unmet in a year.

Renewable Energy Zone

An area chosen by a state government for new wind and solar generation and the transmission to connect it.

PUE and WUE

Power usage effectiveness is a site's total energy use divided by the energy its servers use. Water usage effectiveness is litres of water used per kilowatt hour of server energy. Lower is better for both.

State Significant Development and SEARs

The NSW planning route for the largest projects, and the list of studies the planning department requires for one.

AI

Artificial intelligence. Training builds an AI model over weeks. Inference is the model answering users, which needs to be close to them.

Latency

The time data takes to travel between two points, which rises with distance.

Net revenue and EBITDA

Net revenue is NEXTDC's total revenue less its direct costs. EBITDA is earnings before interest, tax, depreciation and amortisation, a common measure of operating profit.

Brownfield

Land or buildings already in use, often with grid and water connections in place.

11.00 — REFERENCES AND SOURCES

Where every figure comes from

Each source carries an identifier, [R1] to [R20], which appears in the body text where the source is used. Figures labelled PLATE are photographs. Figures labelled FIG. are maps and charts. FIG. 01 and FIG. 06 are original Samso illustrations of sourced data. FIG. 02 to FIG. 05, FIG. 07 and FIG. 08 and all three plates are reproduced from the public documents named in their captions. Figures marked as Samso arithmetic are Samso's own sums on the sources shown and are not company or AEMO figures.

[R1] AEMO, 2026 Electricity Statement of Opportunities (NEM), 25 August 2026. Pages 3 to 6, 22 to 23, 34 to 40, 66 and 80 to 83. www.aemo.com.au/-/media/files/electricity/nem/planning_and_forecasting/nem_esoo/2026/2026-electricity-statement-of-opportunities.pdf

[R2] AEMO, Forecasting growing data centre demand, 2026 ESOO data centre forecasting overview, 25 August 2026. www.aemo.com.au/-/media/files/electricity/nem/planning_and_forecasting/nem_esoo/2026/2026-esoo-data-centre-forecasting-overview.pdf

[R3] AEMO, 2026 ESOO Results Workbook, 25 August 2026, sheet Data Centre Development Outlook and data centre consumption series. www.aemo.com.au/-/media/files/electricity/nem/planning_and_forecasting/nem_esoo/2026/2026-esoo-results-workbook.xlsx

[R4] AEMO, 2026 Wholesale Electricity Market Electricity Statement of Opportunities, June 2026. Pages 6, 25 and 31 to 38. www.aemo.com.au/-/media/files/electricity/wem/planning_and_forecasting/esoo/2026/2026-wem-electricity-statement-of-opportunities.pdf

[R5] AEMO, 2026 WEM ESOO data register, sheet Ch 2_F.11, row 31. www.aemo.com.au/-/media/files/electricity/wem/planning_and_forecasting/esoo/2026/2026-wem-esoo-data-register.xlsx

[R6] AEMO, Quarterly Energy Dynamics, Q3 2024 to Q2 2026, eight reports and their data books. For example www.aemo.com.au/-/media/files/major-publications/qed/2026/qed-q2-2026.pdf

[R7] NSW Government, NSW Data Centre Guidelines, August 2026. Pages 2 to 16. www.infrastructure.nsw.gov.au/media/4jlictae/id0073_nsw-data-centre_guidelines.pdf

[R8] Victorian Minister for Planning, Statement of Expectation for the use and development of data centres in Victoria, 5 October 2026. www.planning.vic.gov.au/__data/assets/pdf_file/0046/778888/minister-for-planning-statement-of-expectation-for-use-and-development-of-data-centres-in-victoria.pdf

[R9] Victorian Government, Sustainable Data Centre Action Plan, planning guidance page, last updated 14 October 2026. www.planning.vic.gov.au/guides-and-resources/guides/sustainable-data-centre-action-plan

[R10] Infratil (ASX: IFT), results presentation for the year ended 31 March 2026, CDC Data Centres slide, PDF page 10, printed slide 9. infratil.com/investors/results/annual-results-for-the-year-ended-31-march-2026/presentation-of-results-march-2026/

[R11] NEXTDC (ASX: NXT), FY26 Annual Report, lodged 27 August 2026, PDF page 7, printed page 6. investorpa.com/announcement-pdf/20260827/334432.pdf

[R12] NEXTDC (ASX: NXT), FY26 Results Presentation, 27 August 2026, slides 16 and 28. www.nextdc.com/hubfs/Financial%20Reports/FY26/NEXTDC%20FY26%20Results%20Presentation.pdf

[R13] Macquarie Technology Group (ASX: MAQ), FY26 Results Presentation, 26 August 2026, slide 8. www.macquarietechnologygroup.com/wp-content/uploads/2026/08/FY26-Group-Investor-Presentation.pdf

[R14] DigiCo Infrastructure REIT (ASX: DGT), FY26 Results Presentation, 21 August 2026, PDF page 11, printed slide 10. www.hmccapital.com.au/investment-strategies/digital-infrastructure/digico-infrastructure-reit/financial-reports-presentations/dgt-fy26-results-presentation/

[R15] SUBCO, release announcing the SMAP cable ready for service, 25 June 2026. sub.co/news/subco-announces-smap-hypercable-ready-for-service

[R16] Vocus, Our network, description of the Australia Singapore Cable, accessed 19 October 2026. www.vocus.com.au/about-vocus/our-network

[R17] Sunshine Coast Council, International submarine cable project page, accessed 28 October 2026. www.sunshinecoast.qld.gov.au/council/planning-and-projects/major-regional-projects/smart-city/international-submarine-cable

[R18] Samso Insights, ASX Data Centre Stocks, What the Market Is Actually Paying, 6 September 2026. www.samso.com.au/post/asx-data-centre-stocks-what-the-market-is-paying

[R19] City of Swan, DA 386/2026 proposed data centre, public engagement page, accessed 28 October 2026. swanengage.swan.wa.gov.au/da-3862026-proposed-data-centre

[R20] NEXTDC (ASX: NXT), M3 Melbourne Power Delay and Revised FY27 Guidance, 21 October 2026, pages 1 to 4. announcements.asx.com.au/asxpdf/20261021/pdf/075kx2sf3k54h5.pdf

Cover photo. IC3 SuperWest, Macquarie Park, Sydney, also shown as PLATE 01. Macquarie Technology Group, FY26 Results Presentation, 26 August 2026, slide 8 [R13].

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