Why grid-forming BESS is becoming the preferred solution for hyperscale data centres

The Australian Energy Market Operator (AEMO)’s 2025 Integrated System Plan (ISP) inputs forecast a remarkable increase in electricity consumption from data centres – from 4 TWh (2% of grid demand) in 2025 to 12.0 TWh (6%) by 2030 and 34 TWh (12%) by 2050 under the Step Change scenario. This growth is fuelled primarily by AI-intensive workloads concentrated in Sydney’s established pipeline and Melbourne’s emerging hubs.

NEM grid challenges: radial networks and system strength deterioration

The NEM’s radial transmission topology, built to serve sparse loads across vast geographies, now amplifies supply vulnerabilities as hyperscale capacity agglomerates in Sydney and Melbourne, representing around 80% of national deployments.

The retirement of large synchronous generators like Liddell Power Station has caused sharp drops in system strength. Meanwhile, intermittent renewable generators lacking inertia, along with hyperscale data centres’ rectifier and DC bus converter architectures, further stress voltage stability, frequency regulation, and thermal headroom per AEMO’s large load access standards.

Hyperscale load profiles: extreme ramp and power quality requirements

Hyperscale data centres require extremely high-power density, with sustained baseloads running at 80–100% utilisation and the ability to handle rapid ramp rates of 10–50% per minute due to GPU-driven bursts during AI training, inference spikes, or retraining cycles.

These demands are further intensified by cooling loads, all while maintaining strict standards:

· Less than 10 milliseconds of acceptable outage,

· Minimal harmonic distortion,

· Robust voltage and frequency ride-through capabilities.

Why grid-forming inverters improve stability for co-located data centers

Grid-forming inverters allow battery energy storage systems (BESS) to act like traditional power generators, shifting their role from energy arbitrage assets to system-strength providers. They help keep the electrical grid stable by providing their own voltage reference, which smooths sudden changes in the system. This also allows the BESS to operate on its own during outages, support black-start capabilities, and offer fast, inertia-like support during grid disturbances.

Importantly, grid-forming inverters could potentially streamline the grid connection process for hyperscale data centres by delivering system strength benefits, dynamic reactive support, and voltage control. This could enable self-remediation in weak nodes.

Grid‑forming BESS as a pathway to faster, more secure connections

Co-locating BESS with grid-forming inverters alongside hyperscale data centres provides several technical and operational benefits.

These systems can handle the fast power swings generated by AI workloads, support the data centre if it needs to operate independently during outages, and help restart the site after a blackout. They also provide short-term support to the grid, such as helping manage voltage and supplying fault current, which makes it easier to connect large, power-intensive facilities.

In weaker parts of the grid, this technology can also simplify and speed up the connection process. Because grid-forming BESS can stabilise the system themselves, they can meet AEMO’s system-strength requirements without needing additional equipment. This can reduce or even avoid the cost of installing separate synchronous condensers—often multi-million-dollar assets typically required when using standard grid-following inverters.

However, the question of whether grid-forming BESS can fully replace traditional “inertia” from spinning generators is still under investigation. While AEMO’s recent studies show that these systems can slow down the rate of frequency change and help with recovery during disturbances, it is not clear yet if this synthetic response can reliably replace the natural inertia from conventional machines. In this context, AEMO has highlighted further testing of grid-forming BESS performance as a priority.

In this evolving landscape, technical advisors play a critical role in helping developers navigate the technical, regulatory, and commercial complexities of deploying grid-forming BESS at hyperscale data centre sites. Advisors provide rigorous grid-connection modelling, validate GFM inverter performance against AEMO requirements, guide technology selection, and optimize co-location design to de-risk approvals and accelerate timelines. By identifying system-strength gaps early and structuring an evidence-based connection strategy, technical advisors enable proponents to confidently deploy grid-forming BESS as a stabilizing backbone for Australia’s fast-growing data centre sector.

As AEMO advances its understanding of grid-forming capabilities, these systems, supported by strong technical advisory input, are well-positioned to transition from “promising” to “proven,” underpinning the next generation of secure, high-availability hyperscale development across the NEM.

Author: Carlos Carrillo, Consultancy ManagerAustralia and New Zealand, Enertis Applus+

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