HEB has begun earthworks and construction of a new access road at Datagrid's Southland "AI factory". Photo / Datagrid
Datagrid has broken ground on what it hopes will become a 78,000sq m data centre on a 42ha site at Makarewa, about 15 minutes’ drive north of Invercargill.
The “AI [artificial intelligence] factory” maker said it has partnered with HEB Construction New Zealand on the earthworks. HEB is a 100%-owned
subsidiary of French multinational Vinci, which reported New Zealand revenue of $1 billion for the year to June 30.
HEB has worked on some of New Zealand’s largest infrastructure projects, including Transmission Gully.
“We are proud to be working with Datagrid to bring lasting economic and community benefit to the region,” said HEB chief executive Mark Evans said.
“Datagrid’s project is a once-in-a-generation opportunity for New Zealand, and I’m pleased we are part of enabling it, with our teams already on site.”
The data centre maker sent the Herald a series of photos of the earthworks. Photos also appeared on the Stop Data Centre NZ website, taken by the group’s members. One member posted: “I want to keep a close eye on the situation.”
Topsoil excavation and roadworks at the Makarewa site. Photo / Datagrid
Last week, the group staged a series of rowdy but peaceful protests around the country.
Last month, NZX-listed Mercury Energy paid $53 million for a 12.7% stake in the Singapore-backed Datagrid.
Datagrid founder and executive chairman Remi Galasso said the money would be used for “horizontal construction” (earthworks) while he embarked on a Series B capital raise to fund other elements of the project.
Source / Stop Data Centres NZ Facebook page
Galasso’s project has recently been on a roll.
Last week saw Datagrid secure a substation deal with national grid operator Transpower, which will see Galasso’s firm pay upfront for transformers and other equipment to support.
The new substation will connect to the existing 220,000-volt transmission lines that currently link the Manapōuri Power Station to Tiwai Point, and will deliver up to 360 million volt amperes of renewable electricity to Datagrid’s “future AI data centre”, Datagrid said in a statement.
A render of Datagrid's proposed Southland data centre, due to become operational in 2028, with founder and executive chairman Remi Galasso (inset).
This equates to approximately 340 megawatts (MW) “and the IT load of the data centre will need to be within this total site capacity”, a Datagrid spokeswoman said. The initial design is for 280MW. 1GW (a gigawatt or 1000MW) is no longer a stretch goal.
Datagrid aims to have the substation online by the end of 2027 and the first phase of its data centre operational in 2028.
A Fitch survey released last month said all of New Zealand’s data centres today consume 172MW (or around 0.5% of New Zealand’s capacity), with a further 89MW under construction.
Datagrid also recently announced Alcatel and OMS Group as contractors for the Tasman Ring Network cable that will export its AI compute capacity to the world - but in a downsized design that has yet to be funded beyond a marine survey.
Opponents have raised concerns about Datagrid and other data centres’ impact on power and water prices, plus noise and surveillance.
Photo / Datagrid
Transpower, Mercury, Contact, Datagrid, Tech New Zealand and others argue that data centres are helping to fund new renewable power and that air-cooling and recirculated water will see the Southland “AI factory” use less water than a small dairy farm, even if it is consented to draw up to 220 million litres of groundwater each year – or enough to facilitate much more intensive evaporative water cooling.
(At Infratil’s annual meeting today, chief executive Jason Boyes said CDC had used closed-loop water cooling for the past 18 years, and paid for new substations, as part of a series of measures to “maintain data centres’ social licence”.)
A Datagrid resource consent application said the data centre would support 75 jobs post-construction. Glasso said that number could increase to 200 to 300, going by overseas “AI factory” trends.
Photo / Datagrid
On surveillance, local data centres don’t facilitate mass monitoring any more or less than facilities offshore. Data centre advocates say server farms are technology-neutral; local facilities at least fall under New Zealand’s privacy laws.
On noise, Galasso told the Herald that mitigation measures include a 6m-high bund around the site “to minimise visual and noise impacts, as well as the acquisition of an extra 10ha to construct a new dedicated access road directly on to Highway 98 – completely avoiding Flora Rd and the nearby primary school”.
Earlier this week, Galasso fronted at a Southland Business Chamber meeting that drew more than 100 locals eager for details on the economic and environmental impacts, according to an RNZ report.
The Datagrid founder said the “AI factory” would need fewer than 34 generators instead of the 84 permitted, and draw a third of its consented water.
On Monday, Prime Minister Christopher Luxon said that if his party leads the next Government, its plan for the South Island will include: ”A new requirement for data centre projects to be accompanied by new, firm generation."
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
