New $700m data centre to use electricity left after Tiwai smelter shuts

A chunk of southern farmland could become part of the answer when it comes to storing massive amounts of digital data.

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The facility will be built on a chunk of Makarewa farmland. Source: 1 NEWS

A $700 million facility is to be built at Makarewa, near Invercargill.

Huge amounts of digital data is produced by people scrolling social media and streaming from the likes of Netflix and TVNZ OnDemand. 

Some of it could end up being stored in Southland in the country's first hyperscale data centre.

“We do believe that Invercargill is the perfect location for data centres,” says Remi Galasso, one of the men behind Datagrid.

“The whole world needs to find sources of green energy to store the data.”

The data centre would be built on Invercargill’s northern boundary and would be the size of nearly six rugby fields.

Developers say it is the prime spot because of its remoteness, Southland's cool climate, and most importantly, the existing electricity infrastructure.

The pending closure of the Tiwai Point Aluminium Smelter will free up supply from the Manapouri Power Station.

With up to 200,000 servers, the centre would use the same amount of electricity as a city the size of Palmerston North.

“This is a once-in-a-lifetime opportunity to shape the way this energy is used and the economies that it supports in this part of the world,” says Guy Waipara from Meridian Energy.

Steve Canny from Great South says “we've been working for almost 13 years in the area of data centres… It is really very nice to see that it is now starting to come to fruition.”

But there is one problem. The connectivity is not good enough.

So New Zealand company Datagrid, which is building the centre, will lay a new submarine cable connecting Australia's east coast with Invercargill. It will then link up with the existing line at Mangawhai near Auckland.

The project has local backing.

“The spinoff from having a significant hyperscale data centre in Invercargill is going to be a lot of short-term employment and then some immediate long-term employment, but [it] will be of high value,” says Carla Forbes from the Southland Chamber of Commerce.

“Making sure that power is used in Southland, where it is generated, is very much high on the agenda list,” says Tracy Hicks, who chairs the Southland Mayoral Forum.

Meridian and Contact Energy are also exploring other ways to utilise the renewable power at Manapouri.

Both companies launched a joint feasibility study last week to look into green hydrogen for the region.

But for now, Invercargill's high-tech future in data centres could begin as early as next year, after the project gets final sign off.