Shane Solly, portfolio manager with Harbour Asset Management<\/p>\n
\u201cThe drag on the power grid, locations set back from residential areas, noise, water use and visual effects, many of the centres are industrial-looking \u2013 these are the considerations by local communities.<\/p>\n
\u201cAnd the big issue for investors is the timing of the user contracts when these multimillion-dollar assets are built,\u201d says Solly.<\/p>\n
\u201cThe demand is starting to accelerate for GPU compute and where they get housed. Data centre development is at an interesting junction globally, especially regarding managing the supply of power.<\/p>\n
\u201cWe have a grid that can supply electricity now and we can provide a degree of firming power to add to the baseload. If there is not enough volume of power or a dry period, a compute load can be moved elsewhere,\u201d says Solly.<\/p>\n
Boyes says power purchase agreements (bringing your own power) with hyperscalers are key to developing data centres.<\/p>\n
The energy companies can bring incremental renewable generation onstream and the data centre operators and their customers pay for the infrastructure connection. \u201cThat\u2019s already happening today.\u201d<\/p>\n
Asked what one decision the next government should make to ensure New Zealand captures more of the AI and data centre opportunity, Boyes says: \u201cEstablish clear national rules, rather than regional ones, around the issues communities care most about.<\/p>\n
\u201cAustralia is moving in this direction. Aligning with those frameworks, where possible, will provide greater certainty for investors while helping communities understand how these developments should be managed.\u201d<\/p>\n
Boyes says putting rules in place was important so people don\u2019t have to worry, and following the Australian template isn\u2019t a bad start. \u201cHaving totally different rules doesn\u2019t make sense.\u201d<\/p>\n
Australia is responding to the rapid growth of AI data centres by developing a national regulatory framework to curb environmental impacts, protect local resources, and ensure economic benefits stay within the country.<\/p>\n
Prime Minister Anthony Albanese announced plans to introduce binding Australian Standards for AI into Parliament early next year.<\/p>\n
The Australian plans also include:<\/p>\n
\u00b7 Energy and Water Rules: Large data centres will face mandatory rules to minimise and report water usage (including prioritising recycled water), cover their own grid connection and network upgrade costs, and ensure power demands do not spike local electricity prices.<\/p>\n
\u00b7 Sovereign Compute and Access: Federal officials have urged operators to provide local start-ups, researchers, and not-for-profit organisations with fair-term access to compute capacity so Australia does not become dependent on imported artificial intelligence.<\/p>\n
Boyes says the design of data centres was crucial. \u201cSome designs evaporate water, some have black water, you can\u2019t do that. CDC Data Centres has developed a closed-loop cooling system, and you are good to go.\u201d<\/p>\n
Infratil has a near 50% shareholding in CDC, which has three general data centres in Auckland \u2013 the first two \u201care pretty well full to capacity.\u201d<\/p>\n
New Zealand hosts about 64 general and cloud data centres (including facilities by providers such as Microsoft, Amazon Web Services, and Datacom), but at present there are no centres built exclusively as a dedicated \u201cAI factory\u201d.<\/p>\n
Datagrid NZ has received resource consent to build the country\u2019s first $3.5m AI data centre at Makarewa near Invercargill and is moving through full funding and grid approval. The centre is expected to draw up to 280MW of power.<\/p>\n
Mercury Energy is investing $53m for a 12.7% shareholding in Datagrid Holding Group NZ and has signed a 140MW power purchase option for renewable energy.<\/p>\n
Contact Energy and CDC are working together on a resource consent for a potential 250MW AI data centre at Stratford near the site of Contact\u2019s Taranaki Combined Cycle gas plant, which has been retired but is close to the transmission grid.<\/p>\n
The Stratford facility would be supported by battery storage development. CDC said it would explore a net zero-waste cooling situation, including rainwater collection.<\/p>\n
Solly says, \u201cWe do have a temperate climate and that\u2019s beneficial from a cooling point of view. That\u2019s a good start to drive less electricity to cool the facilities.\u201d<\/p>\n
Boyes says large-scale AI facilities are most efficiently financed by global technology companies with strong investment-grade balance sheets.<\/p>\n
At the same time, it can be cost-effective to make additional capacity available within those facilities to support New Zealand\u2019s own AI capabilities and critical services.<\/p>\n
\u201cDone well, that has the potential to lift productivity across the economy,\u201d says Boyes.<\/p>\n","protected":false},"excerpt":{"rendered":"Shane Solly, portfolio manager with Harbour Asset Management \u201cThe drag on the power grid, locations set back from…\n","protected":false},"author":2,"featured_media":645694,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[109425,365,363,364,28246,138,34518,3470,3105,4190,75526,2082,26477,3556,117,111,139,69,801,6122,3271,199,145,25396,80],"class_list":["post-645693","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-advantage","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-begin","tag-business","tag-centres","tag-clear","tag-data","tag-demand","tag-establishing","tag-for","tag-leaders","tag-national","tag-new","tag-new-zealand","tag-newzealand","tag-nz","tag-rising","tag-rules","tag-should","tag-take","tag-technology","tag-urge","tag-zealand"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/645693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=645693"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/645693\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/645694"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=645693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=645693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=645693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}