Regional Australia now has 3.1 GW of proposed AI campuses. IREN’s Wagga Wagga filing this month is next

Australia’s next wave of AI data centre capital is heading inland. In the past five weeks, two developers have put 2.3 GW of proposed capacity on the edge of Wagga Wagga, a regional city in southern New South Wales. Add IREN’s 800 MW site at Bundey, north-east of Adelaide, and three regional campuses now propose 3.1 GW.

The timing matters. AEMO’s latest forecast says data centre demand on the east coast grid will nearly septuple in a decade, and 96% of today’s demand sits in New South Wales and Victoria. Regulators have also told developers they will be expected to bring their own clean, firm power and pay for their own connections. Regional sites next to existing 330 kV lines are the developers’ answer. This post looks at where the money is going, who gains, and how much of it is real.

How we got here: demand that has tripled in eight years

AEMO counts around 165 data centres on the NEM. They used about 5 TWh of electricity in the 2026 financial year, roughly 3% of operational consumption, according to the 2026 ESOO data centre forecasting overview. Their average monthly demand rose from nearly 200 MW in January 2018 to more than 700 MW in June 2026.

That demand is concentrated. New South Wales took 66% of it in FY2026 and Victoria 30%. South Australia had 2%, Queensland 1% and Tasmania less than 1%. In practice that means western Sydney and western Melbourne, where most hyperscale and colocation capacity sits today.

AEMO’s forecast for the decade ahead is steep. Under its Step Change scenario, which it treats as the most likely one, data centre consumption triples to around 15 TWh, or 7.8% of operational consumption, by FY2030. It then grows to about 34 TWh, or 13%, by FY2036 before growth starts to taper off. iTnews reported that last year’s forecast was 21.4 TWh by 2034-35, so the new outlook is materially higher.

In our calculation, 34 TWh a year is an average load of about 3.9 GW, against about 0.6 GW implied by 5 TWh today. Somewhere in Australia, roughly 3.3 GW of average data centre load has to be connected and supplied within ten years. The question is where.

What changed: the build moves to 330 kV country

Three projects have answered that question with regional sites.

CDC Ashfords Road, Gregadoo (NSW). CDC Data Centres has proposed four single-storey data centre buildings with about 189,325 square metres of floor area and up to 1.4 GW of power demand, W.Media reported from the project’s scoping report. The estimated development cost is about A$15 billion excluding GST. The site sits about 1.3 km from a 330 kV Transgrid substation. The scoping report also lists up to 384 diesel generators and a 13.1 MWp rooftop solar array. The NSW Planning Portal lists the project as State Significant Development SSD-144289240, now at the “Prepare EIS” stage. On 12 October, Wagga Wagga City Council authorised its general manager to enter a contract to sell the land to CDC.

IREN Redbank, Gregadoo (NSW). On 15 October, W.Media reported that IREN, the Nasdaq-listed AI cloud provider, plans a 900 MW campus called Redbank in the same area, with reported investment of more than A$10 billion. IREN targets initial energisation in 2029 and a staged build over six to eight years. The company says it will fund its own grid connection and contract new generation and storage. Redbank is not part of IREN’s announced 5 GW secured-power portfolio, and no connection agreement has been announced.

IREN Bundey (South Australia). IREN announced its first Australian campus in June: 800 MW at Bundey, about 125 km north-east of Adelaide. Unlike the two NSW projects, it has a transmission connection agreement covering four 330 kV feeder exits that can support up to 800 MW without network upgrades, W.Media reported. IREN expects energisation from 2028.

Sources: W.Media, 22 Sep 2026; W.Media, 14 Oct 2026; W.Media, 15 Oct 2026; W.Media, 4 Jun 2026; NSW Planning Portal. Reported CDC site areas differ (103.8 ha and 103.4 ha), and the council resolution cites 232 Ashfords Road while the scoping report cites 216.

IREN’s co-chief executive explained the Bundey choice in June in terms that apply to all three sites.

Why regional: the new rules reward bringing your own power

The policy direction of 2026 favours developers that can show they will not crowd out households on the grid.

In March, the Australian Government released its Expectations of data centres and AI infrastructure developers. The five expectations cover the national interest, the energy transition, water, skills and jobs, and local research capability. They are not binding, but the government has said that proposals most closely aligned with them will be prioritised. The energy expectation asks operators to pay their share of connection and transmission costs and to support new clean generation.

In July, the Australian Energy Market Commission (AEMC) gave energy ministers its advice on regulatory pathways for data centres, considered at the 28 July ministerial meeting. pv magazine Australia reported four linked recommendations: surrender renewable certificates from new, additional generators; show demand is backed by new firm capacity; register as market participants; and use connection agreements that reward flexible demand and co-location with generation.

New South Wales has also started sorting the queue. Its Investment Delivery Authority endorsed 15 data centre projects worth A$51.9 billion in March, while about A$40.7 billion of data centre and technology proposals were not endorsed because they were judged premature or speculative, Government Technology Review reported.

Sources: Department of Industry, Science and Resources; Government Technology Review, 30 Mar 2026; pv magazine Australia, 6 Aug 2026; AEMO. The late-October date for the access-standards decision is as reported by pv magazine in August and may move.

In our view, these rules change the site maths. A developer that must bring its own renewables and firming, and pay for its own connection, gains more from land next to existing high-voltage lines and large renewable zones than from a few extra kilometres of fibre to Sydney. CDC’s Wagga Wagga site is 1.3 km from a 330 kV Transgrid substation. Bundey sits at the centre of ElectraNet’s proposed Northern Transmission Project.

Who gains, and how much

Regional councils and communities. CDC has offered a package of up to A$225 million, W.Media reported: at least A$150 million through a voluntary planning agreement tied to the land sale, equal to at least 1% of the A$15 billion cost, plus A$75 million of community initiatives. That is 1.5% of the project’s estimated cost (our calculation). IREN has put its own Redbank figure at more than A$200 million over 30 years in community benefits, local infrastructure and council rates. Both depend on the projects being approved and built.

Construction and local labour. IREN targets more than 500 construction jobs and more than 200 ongoing roles at Redbank, and gave the same figures for Bundey. Staged builds over six to eight years mean steady work rather than a single peak.

Generation, storage and network builders. If the AEMC’s recommendations become rules, every regional campus needs contracted new renewables, firming capacity and storage. CDC’s own scoping report also lists up to 384 diesel generators for backup. Transgrid and ElectraNet gain large, creditworthy customers that pay for their own connections.

Equipment vendors. At about A$11 million per MW of stated investment, 3.1 GW of regional campuses would imply more than A$30 billion of building and power infrastructure spend if all three proceed at the same rate (our calculation, before servers and GPUs).

Sources: W.Media (22 Sep, 14 Oct and 15 Oct 2026); AEMO 2026 ESOO overview (27% average grid connection utilisation in FY2026). Calculations by DC Market Insights. The two investment figures come from different documents and may not cover the same scope, so they are compared only per MW, not added for a market total.

How much of it is real

The opportunity is large, but AEMO’s own numbers say most proposed capacity will not show up as load on schedule. Network providers reported 225 data centre projects with 67 GW of combined capacity in development, against about 0.7 GW of average demand today. AEMO’s overview says 36% of the developing projects in the 2025 ESOO were cancelled. Grid connections were used at about 27% on average in FY2026, and new sites take five to ten years to reach load maturity.

AEMO’s overview reports that 36% of developing projects in the 2025 ESOO were cancelled; iTnews reported AEMO saying more than 40% of projects since 2025 have dropped out or regressed in connection status. The two figures measure different things and are not combined here.

Apply those ratios to the three regional campuses and the picture changes. At 27% utilisation, 3,100 MW of connection capacity means about 840 MW of average load. At the roughly 50% utilisation iTnews reported AEMO expects for mature sites, it is about 1.55 GW, or about 13.6 TWh a year. That would be around 40% of AEMO’s entire FY2036 data centre forecast from just three regional sites (our calculation). Either these campuses take a large share of national growth, or some of them will be built more slowly or smaller than proposed.

Our own tracker shows how early this is. DC Market Insights data for Australia currently lists four facilities from two operators, with 170 MW live and 418 MW planned. None of the three regional campuses is yet in that count; together they are about 7.4 times our tracked Australian pipeline. We will add them as they reach planning and connection milestones.

The wider pattern in Asia-Pacific

The move to power-first regional sites is not only Australian. In Malaysia, the government has told data centres to pay for the full power they reserve and for their own transmission upgrades, which we covered on 19 October. In India, new money is moving beyond Mumbai to Hyderabad, Bihar and Raigad, as we reported on 18 October. In Japan, NTT Data was reported by Nikkei on 13 October to be in final talks to build a data centre of up to 500 MW in Osaka for Anthropic, with on-site generation under study because drawing that much from the grid is hard. The common thread is that power, not fibre or land, now decides where AI capacity lands.

For market sizing, see our Australia Data Center Infrastructure Market report (USD 5.81 billion in 2025, USD 19.98 billion by 2035) and the Australia AI Data Center Market report (USD 924.59 million in 2025). For the backup power these campuses specify, see the Data Center Generator Market report. Our DCMI data pages track facilities, deals and power rules by country.

What to watch next

• Late October 2026: AEMC final determination on technical access standards for large inverter-based loads such as data centres, as reported in August.
• End of October 2026: IREN plans to lodge the Redbank scoping report with the NSW Department of Planning, Housing and Infrastructure, the first formal planning step.
• 4-5 November 2026: IREN community drop-in sessions in Wagga Wagga.
• Next stage, no date set: CDC’s environmental impact statement for SSD-144289240, then public exhibition.
• 2028: IREN’s target for first energisation at Bundey.
• 2029: IREN’s target for initial energisation at Redbank.
• FY2030: AEMO’s Step Change checkpoint of about 15 TWh of NEM data centre use.

Frequently asked questions

How much data centre capacity is planned near Wagga Wagga?

Up to 2.3 GW. CDC Data Centres has proposed a campus of up to 1.4 GW at Ashfords Road, Gregadoo, at an estimated A$15 billion, and IREN has proposed the 900 MW Redbank campus nearby, with reported investment above A$10 billion. Neither has final planning approval or a final grid connection agreement.

How much electricity will Australian data centres use?

AEMO forecasts NEM data centre use of about 15 TWh by FY2030 and about 34 TWh by FY2036, or 13% of operational consumption, under its Step Change scenario. That is up from about 5 TWh, or 3%, in FY2026, from around 165 data centres.

Why are AI data centres moving to regional Australia?

Power. Regional sites such as Wagga Wagga and Bundey sit next to 330 kV transmission. New national expectations and AEMC advice ask data centres to fund their own connections and bring new clean, firm energy. IREN’s 800 MW Bundey site has a connection agreement needing no network upgrades.

Will all 3.1 GW be built?

Probably not on the proposed schedule. AEMO says 36% of developing projects in its 2025 forecast were cancelled and grid connections ran at about 27% utilisation in FY2026. At that rate, 3.1 GW of connections would mean about 840 MW of average load (our calculation).