Sydney’s 16 GW data centre queue is running out of time
Someone is sitting in a boardroom right now approving hundreds of millions in Sydney data centre capex against a 2030-2033 commercial operations date.
The transmission network that needs to serve them won’t be ready until 2037 at the earliest. And the project that unlocks it — Sydney Ring South — hasn’t even published its Project Assessment Draft Report, the first consultative milestone in the regulatory process.
That gap between what the market believes and what the infrastructure can actually deliver is where stranded capital lives.
Announced at the 2026 CEDA Energy and Climate Summit, Sydney has over 16 GW of data centre connection enquiries lodged with Transgrid, the high-voltage transmission network operator for NSW.
To put that in context, NSW operational demand has exceeded 13 GW only a few times in the history of the National Electricity Market. 16 GW of data centre connection enquiries lodged with Transgrid would, if realised, exceed NSW’s all-time peak grid demand. Continuously.
The demand is concentrating in Western Sydney, already one of the most congested parts of the transmission network. Transgrid is not standing still. A suite of near-term upgrades is underway — transformer upgrades at Sydney West and Holroyd, a new bulk supply point near Kemps Creek for the Western Sydney Aerotropolis, voltage stability works at Vineyard, and a new 330kV substation at Mt Druitt, spanning 2028 to 2031. According to the 2025 Transmission Annual Planning Report, these are sized to accommodate metropolitan Sydney load growth that includes 800 MW of data centre load. Not 16 GW.
The real unlock is Sydney Ring South
Sydney Ring South (SRS) is an actionable Integrated System Plan project that will deliver a new 500kV double-circuit transmission line connecting Bannaby to a proposed new South Creek substation, bringing Snowy 2.0, the South-West REZ’s 2.5GW, and interstate capacity from South Australia and Victoria via HumeLink and VNI West directly into metropolitan Sydney. When it is built, the congestion problem is largely solved.
The question is when — and the answer is not 2033.
Here is why.
SRS will have to follow the Regulatory Investment Test for Transmission (RIT-T) process.
The RIT-T is the economic assessment process TNSPs must run under the National Electricity Rules before building any major transmission project, requiring them to publish a Project Assessment Draft Report (PADR) identifying the preferred option, consult the market, then publish a Project Assessment Conclusions Report (PACR) for AER scrutiny. It exists to ensure consumers — who ultimately pay for transmission through their bills — are not carrying the cost of overbuilt or uneconomic network assets.
Stage 1 — PADR consultation: minimum 6 months, likely longer. The SRS Project Assessment Draft Report has not been published yet. In May 2025, the Australian Energy Regulator agreed to an extension by which Transgrid must publish the PADR for Sydney Ring South project to 30 April 2026, which has yet to be fulfilled. When Transgrid does publish, National Electricity Rules mandate a minimum 6-week consultation period. Given this project has to connect into metropolitan Sydney, expect a longer and more contested process.
Stage 2 — PACR published following PADR: estimate 18 months. Using VNI West as a comparable, the gap between PADR close and a final PACR has run to around 18 months.
Stage 3 — AER regulatory approval: 6–9 months minimum. Assume 9 months if no party disputes the preferred option. If challenged — and on a project of this scale, disputes are likely — add additional time to work through each submission carefully.
Stage 4 — EIS and planning approvals: 2 years at a minimum. This is where the schedule really breaks apart. Securing state and federal environmental approval for a high-voltage transmission corridor connecting into metropolitan Sydney and possible national park will not move quickly. The Snowy 2.0 Transmission Connection Project — a new 9km transmission line through Kosciuszko National Park — took 20 months from EIS exhibition to full dual-government approval. SRS is orders of magnitude more complex.
Stage 5 — Easement acquisition and land access: 3+ years. HumeLink is the benchmark. Transgrid spent over three years negotiating land access across a largely rural route. Transgrid’s Annual Planning Report notes Sydney Ring South is to connect between Bannaby – where HumeLink ends - and a new substation at South Creek, a suburb adjacent to the Western Sydney Airport. Residents at Bannaby have been engaged by Transgrid for the past 7 years on HumeLink and will likely be fatigued and resistant to another transmission project in their local community.
Stage 6 — Procurement and construction: 5+ years. Transmission equipment procurement runs 24 months for long-lead items alone. Construction of a project at this scale is a minimum of three years on top, in optimal conditions.
Add it up: if Transgrid publishes the SRS PADR in 2026, energisation before 2037 is optimistic.
There is a further complication no timeline model captures cleanly: the political cycle. Erecting 80-metre steel lattice towers required for a 500 KV transmission line into western Sydney’s South Creek is not an engineering problem — it is an electoral one. This will be a tough ‘sell’ to voters if the project RIT-T is expedited before the 2027 NSW state election.
What this means for data centre developers and investors
If your hyperscale data centre project is not already near the front of Transgrid’s Sydney West substation connection queue, the window for a commercially viable project has closed.
For those data centres not at the front of the queue, rerun your internal model against a realistic 2037 connection date. Does the equity IRR still clear your hurdle rate? Does your anchor tenant accept a four-year delivery slip without renegotiating rent? Does the renewable PPA you’ve already signed for 2033 hold its value when the load isn’t there to absorb it?
If any of those answers is no, the model in your investment committee paper is wrong.
Sydney Ring South is the most consequential transmission project for data centres in Australia. Follow the Bottleneck will continue to track its development and explore the opportunities available to data centres to actually accelerate a pathway to power.