‘A lot of red flags’: plans for New Zealand’s first datacentre spark concern as locals demand greater transparency

A digital rendering of the Datagrid data centre in Makarewa, New Zealand. Composite: Datagrid NZ View image in fullscreen A digital rendering of the Datagrid data centre in Makarewa, New Zealand. Composite: Datagrid NZ ‘A lot of red flags’: plans for New Zealand’s first datacentre spark concern as locals demand greater transparency Plans to build a NZ$3.5bn datacentre in Makarewa in the country’s south has drawn concern about electricity and water use, and potential noise pollution People living near the site of New Zealand’s first planned AI datacentre are calling for more transparency about the project, especially about how the centre’s huge electricity and water use and potential noise pollution could affect them. Singapore-based company Datagrid has secured approval to build a NZ$3.5bn (US$2bn) AI datacentre on a 49-hectare site in Makarewa, just north of New Zealand’s southern-most city, Invercargill. Construction is due to begin this year, with the centre becoming operational by 2028. Datacentres are a ticking timebomb. We must make sure AI’s benefits outweigh the costs | Nicki Hutley Read more The facility will be used for AI training, processing and data storage and will serve global AI and cloud providers, says the company’s website. Datagrid also plans to build a high-speed internet cable between Invercargill and Australia. Datacentres require large amounts of electricity, water and land, and their rapid growth is igniting debate and protest around the world, as communities grapple with the associated environmental issues, increasing power bills and claims that they are not seeing local economic benefits , despite data company promises. The centre in Makarewa will become New Zealand’s second largest user of electricity, after the nearby Tiwai Point aluminium smelter, using 280MW of electricity. Local authorities have hailed the project as a win for the region, saying it will create jobs and sped up the internet. The company says about 1,200 jobs will be created during the construction phase, and about 50 permanent positions on completion. But Angus Dowell, an economic geographer whose PhD project looks at the construction of datacentres said there were “a lot of red flags,” about the project, and about New Zealand’s push to become an AI hub. View image in fullscreen The Tiwai Point Aluminium Smelter in Invercargill. Photograph: Dianne Manson/Getty Images “[The centres] provide short term economic benefits in the form of construction, but they’re very, very low employers long term, and so the long term benefits to local economic development are just not there, they don’t stack up,” he said. Residents in the neighbouring community are worried about the development. “Locals down here kind of feel like we’ve had our region sold out from underneath us,” said Kelly Blomfield, the chair of the Southland Sustainable Resource coalition, an advocacy group that monitors regional infrastructure projects. “I think that most people’s actual concern i