We have been bullish on sites outside Sydney and Melbourne, and in time we remain confident developers will gain more comfort to explore those new jurisdictions.
But for now, the money and attention remains on sweating the existing network of the two largest data centre locations in Australia.
So we turn once more to Melbourne’s west, where a zero-sum game knife fight is playing out over what is likely to be the final remaining capacity the substations can offer before significant new energy infrastructure, generation and storage is committed.
The set up
AEMO found in its Victorian Annual Planning Report that the 220 kV transmission corridor between Moorabool, Geelong, Deer Park and Keilor is anticipated to become heavily constrained over the coming decade.
VicGrid found similar, with its Victorian Transmission Plan 2025 putting forward significant investment for the Western Victoria reinforcement program, proposing upgrading the existing substations of Elaine, South Morang, Keilor, Deer Park and increasing the capacity of the Ballarat to Moorabool 220 kV line.
For its South West expansion program, VicGrid propose a new double circuit 500 kV line from Tarrone to Truganina and a new single circuit 500 kV line from Truganina to Sydenham by 2033. This program includes a new 500/220 kV substation at Truganina and high-capacity 220 kV lines to Deer Park and Keilor to provide an alternative flow path from the proposed REZs into Melbourne and service the potential new large loads in this area.
Deer Park Terminal Station
Deer Park Terminal Station (DPTS) is located in the Melbourne West Growth Corridor.
DPTS has two 225 MVA 220/66 kV transformers with nominal N-1 capacity of 225 MVA and associated equipment as transmission connection assets to supply the local Powercor network. It is connected into one of the three 220 kV circuits that connect Keilor Terminal Station and Geelong Terminal Station.
Upgrades to DPTS need to occur.
Due to continued growth in demand across the network catchment area served by DPTS, including the proposed connection of the new Mt Cottrell Zone Substation and committed major loads have reduced capacity at DPTS during periods of high demand, the firm capacity of DPTS has been exceeded and the energy at risk in the event of a transformer failure is forecast to become significant from 2027.
The 50th percentile summer forecast rises from 367 MVA in 2026 to 542 MVA in 2028 – a 47% increase in two years, against a recorded peak of 324 MVA and a firm rating of 225 MVA.
Powercor attributes this growth to high population growth alongside increasing commercial and industrial customer connections. It does not explicitly call out data centre loads but there is no way suburban population growth can move a summer peak forecast by 47% in two years.
By summer of 2029-30, Powercor forecasts peak demand will exceed the import capacity of the station outright, leading to the very real possibility for the need to shed load.
The fix for DPTS
Powercor identified one credible network option of installing a third 225 MVA 220/66 kV transformer at DPTS. A third transformer allows more supply which in turn would overload the 220 kV lines feeding the station, so it requires the two existing Geelong-Keilor 220 kV circuits to be cut into DPTS as part of the works. Total cost comes to $86 million.
Powercor put the total transfer capability from Deer Park to Altona West, Altona-Brooklyn and Keilor at 33.9 MVA in summer 2025/26 — against a forecast peak of 542 MVA in 2028. Because of the low available spare capacity in the broader area and the increasing load growth, Powercor concluded transferring load between stations is not a viable long-term solution.
One item that needs reconciling with VicGrid. The 2025 Victorian Transmission Plan lists switching the Geelong-Keilor circuits into Deer Park at $50 million with a 2029 date. Powercor price the cut in of the two Geelong-Keilor circuits at $66 million with works needing to begin from 2027. The scope of works may not be identical but the two public documents carry different costs and delivery dates which VicGrid may need to clarify.
So for a data centre circling DPTS, there is no capacity until the load shedding risk is remediated.
Truganina Terminal Station
VicGrid’s $410 million Truganina Terminal Station does not yet exist. The 2025 Victorian Transmission Plan’s south west expansion program has an in-service date for the station of 2033 for TTS and two 220kV double circuit lines connecting TTS to DPTS. And in VicGrid’s own words, a location still to be determined, albeit its Victorian Transmission Plan indicates it is ~8km away from DPTS.
VicGrid note that after redirecting the two Geelong to Kilor lines that currently by-pass Deer Park and turning them into Deer Park is complete, DPTS will be supplied from Geelong Terminal Station. After TSS is complete, DPTS will be supplied from Keilor.
The non-network door is open
There has got to be a way forward to better shift load amongst the terminal stations of the Melbourne West Growth Corridor to unlock capacity for data centre investment.
Powercor considered a confidential non-network option proposal to address the load constraints at DPTS, proposing increasing capacity by 8.8 MW with an expansion up to 40 MW firm capacity available no earlier than 2028. But this proposal was rejected as it would only defer the capacity constraints by no more than 6 months.
It would need to be a much larger proposal, and one that satisfies the increasingly strict and complex rules for data centres to comply with when seeking electrons in the National Electricity Market.
This could look like installing a significant grid-scale battery precinct to help shift the load amongst the proliferation of west Melbourne terminal stations and/or more sharply manage the peak demand in the summer months – which is the crux of the problem.
It would need to be lodged with Powercor in concert with VicGrid with the latter likely to be somewhat distracted by a brand new energy minister, a substantial internal restructure and preparing red, blue and orange books for the 28 November Victorian State Election.
What this means for investors
The majority of data centre interest in Victoria has been focused on deploying in the Melbourne West Growth Corridor.
DPTS’s bottleneck is two transformers that step down 220 kV to 66 kV for Powercor’s network. They are rated at 225 MVA, there is no spare capacity and every data centre looking to locate near TTS draws power from them.
A data centre connecting at 220 kV does not use those transformers at all. It takes power upstream of the bottleneck, so it is not competing for the same 225 MVA.
There are possibly three locations to do this:
DPTS as it is about to receive two more Geelong-Keilor 220 kV circuits from 2027.
At a new connection point along one of the Keilor-Geelong circuits; or
At another terminal station such as Altona Terminal Station West and Keilor Terminal Station.
Any of the three options would definitely require a connection enquiry lodged with VicGrid to confirm.
Should you require more information, please feel free to get in contact on info@followthebottleneck.com.
Not investment advice. This article uses public information only.
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Sources: Victorian Transmission Plan 2025, Victorian Annual Planning Report October 2025, Emerging Load Constraint: Deer Park Terminal Station Project Assessment Conclusions Report January 2026