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🇬🇧 United Kingdom /Technology

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

From The Guardian · () English

Summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • Plans for New Zealand's first AI data center in Makarewa are raising concerns among local residents about electricity and water usage, and noise pollution.
  • The NZ$3.5 billion (US$2 billion) facility by Singapore-based Datagrid will be a major electricity consumer, second only to the Tiwai Point aluminium smelter.
  • While authorities and the company tout job creation and economic benefits, critics question the long-term local economic impact and transparency of the project.

Plans for New Zealand's first artificial intelligence data center, slated for construction in Makarewa near Invercargill, are facing scrutiny from local residents who are demanding greater transparency. Concerns center on the project's substantial electricity and water demands, as well as potential noise pollution, and how these factors could impact the surrounding community.

A lot of red flags

— Angus DowellExpressing concern about the planned AI data center project.

The facility, a NZ$3.5 billion (US$2 billion) investment by Singapore-based company Datagrid, is approved for a 49-hectare site. Expected to be operational by 2028, it will be used for AI training, processing, and data storage, serving global AI and cloud providers. Datagrid also intends to establish a high-speed internet cable link between Invercargill and Australia. The Makarewa data center is projected to become New Zealand's second-largest electricity consumer, utilizing 280MW, surpassed only by the nearby Tiwai Point aluminium smelter.

Local authorities have promoted the data center as a significant regional development, anticipating job creation during the construction phase (estimated at 1,200 jobs) and ongoing permanent positions (around 50). The company also highlights the project's role in accelerating internet infrastructure. However, Angus Dowell, an economic geographer specializing in data center construction, expressed reservations, pointing to "a lot of red flags." He argued that while data centers provide short-term construction employment, their long-term contribution to local economic development is minimal due to low permanent staffing levels.

Locals down here kind of feel like we’ve had our region sold out from underneath us.

— Kelly BlomfieldDescribing the sentiment among residents regarding the data center development.

Residents near the proposed site share these concerns. Kelly Blomfield, chair of the Southland Sustainable Resource coalition, stated, "Locals down here kind of feel like we’ve had our region sold out from underneath us." She added that attempts to obtain more information from Datagrid have been unsuccessful, leading to a sense of unease about decisions being made without community input. The project is part of a broader government initiative, supported by Invest New Zealand, aiming to attract substantial foreign investment for data center and AI infrastructure development.

I think that most people’s actual concern is that we don’t find out anything until its done.

— Kelly BlomfieldHighlighting residents' desire for more information and involvement in the project.
DistantNews Editorial

Originally published by The Guardian. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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