Nexa Advisory welcomes the opportunity to share our views and insights on the NSW Parliamentary inquiry into data centres. Our submission is focused solely on the implications of data centres for New South Wales’ electricity sector.
Data centres are emerging as one of the most significant drivers of electricity demand growth in New South Wales and across the National Electricity Market (NEM). Their rapid expansion presents a critical policy challenge: without coordinated governance, data centres risk increasing system costs, extending fossil fuel reliance and slowing the pace of decarbonisation. However, if appropriately integrated into the energy system, they can play a central role in accelerating renewable energy investment and enabling the transition to net zero.
Nexa Advisory’s core position is that data centres should be treated as strategic demand-side infrastructure, not simply large electricity users. In particular, data centres can act as long-duration, creditworthy demand anchors, capable of underpinning Final Investment Decisions (FID) for renewable energy projects at scale.
Realising this opportunity requires a shift from project-by-project approvals to a principles-based, whole-of-system governance framework. This framework must ensure that data centre development contributes positively to the energy transition, rather than imposing uncoordinated costs on the system or the community.
As such, the Committee has a critical opportunity to establish a policy framework that ensures data centres deliver net public benefit, aligned with the state’s energy, economic and climate objectives. With the right governance framework, data centres can become a powerful enabler of renewable energy investment, accelerate clean energy investments and support a more resilient, efficient energy system. Without it, they risk becoming a structural constraint on the transition, increasing costs, emissions, and system complexity.
Read our submission here: Nexa Advisory submission – NSW inquiry into Data Centres