A $1 billion project that will transform Southland into a low-cost, ‘green’ hub takes two major steps to store data and provide cloud computing services in Australia, New Zealand and beyond.
The company behind the project, DataGrid, has purchased a 43-acre site in northern Makareva, near Invercargill, with plans to begin construction on a massive cloud computing facility later this year.
Singapore-based shipping giant BW Group together invested in DataGrid and previously agreed to acquire a 37.5 percent stake in a holding company owned by ColPlus founder Malcolm Dick.
BW Group President Andreas Sohmann-Pao said the datagrid will enable “the application of New Zealand’s renewable energy for sustainable digital infrastructure and connectivity for the country”.
BW had previously agreed – subject to approval from the Foreign Investment Office – to purchase the entire Hawaiki Submarine Cable Company, which was founded and headed by DataGrid CEO Remy Gallaso.
Hawaiian already has a $445 million fiber optic cable linking the North Island to the United States and Australia, and announced in November that it would build another 22,000 miles of submarine Internet cable network – Hawaiian Nui – across New Zealand. The South Island connects Australia to Singapore. Connects Indonesia and America.
In December, Hawaiian was selected by the Chilean government to run the proposed Humboldt Cable between Chile and Australia, which could run through Invercargill and potentially connect Antarctica as well.
One goal of Hawaiki Nui is to connect DataGrid data centers to customers in Australia so that major computing companies can harness the region’s cheap, “green” power to deliver applications to Australians.
Galasso confirmed that the total investment in Hawaiki Nui and the DataGrid data center will exceed $1 billion.
DataGrid had discussed with Southland District Council to approve funds for a data center at the site purchased between Flora Road East and Taylor Road in North Makareva.
The datagrid hopes to apply early this year will be to facilitate up to 10 modules of 6,500 square meters which, when built, will cover an area of approximately nine rugby fields.
Galasso said it would take between 800 and 1,200 workers to build and equip the data center during peak construction times.
“We hope to start construction after getting approval from Southland District Council, hopefully in the second half of this year,” he said.
He said initial construction would be for a single module, costing more than $100 million, to be completed by the end of next year.
Requests for permission from the sources would enable the data center to consume 150 MW of electricity, which is more than a quarter of the electricity currently used by the Tiwi Point aluminum smelter in Southland.
Southland District Council Mayor Gary Tong said he was excited about the progress of the technology venture.
“Everything is going as with any development, and of course the data center concept has been at the fore since Rio Tinto announced they were shutting down Ti,” he said.
“Once I am fully informed, I will do my best to make sure the correct procedures are in place to make sure it runs smoothly.”
Southland District Council Mayor Gary Tong says it is “fantastic” that the DataGrid enterprise is progressing as the sector needs to diversify.
Meridian Energy’s general manager of development, Guy Waipara, said the datagrid could provide 100 megawatts of electricity whether the smelter remains open after the end of 2024 or whether Meridian plans to build a “green hydrogen” facility in the region.
“Will we find a way—of course,” he said.
Galasso suggests that the South Island could match Iceland’s success in the international data center industry.
“We are very much ahead with some anchor clients and look forward to making more announcements,” he added.
Remi Gallaso, CEO of Hawaiian Cable, says the combination of Hawaiki Nui (pictured above) and Humboldt Cable will open a new route connecting Southeast Asia, Australia and South America.
One advantage of locating data centers in Southland is that the region’s cooler climate means they can be at least 15 percent more energy efficient than comparable facilities in Auckland, Melbourne or Sydney, Galasso said.
The reduced cooling requirement will result in millions of dollars in cost savings for DataGrid customers, he added.
“From a global perspective, it is also the ‘MW’ of electricity generation that can be used for other industrial needs.”
DataGrid co-founder Remi Gallaso said he looked at the number of locations for the data center before buying the land.
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DataGrid co-founder Remi Gallaso said he looked at the number of locations for the data center before buying the land.