Southland and Queenstown mayors enthuse over $700m data centre project

Monday, 14 December 2020

Queenstown Lakes mayor Jim Boult says Datagrid could help the city market itself as a place for US firms to locate satellite offices.

Southland District mayor Gary Tong says a proposed $700m high-tech investment in Southland could accelerate the trend for people to move to the region to work remotely, as well as creating its own jobs.

Queenstown mayor Jim Boult said he hoped the venture would also help its drive to attract technology companies to the city following the hard hit to its economy from Covid-19.

Technology industry entrepreneurs Remi Galasso and Malcolm Dick plan to lay two new subsea internet cables to Invercargill and build a 40,000 square metre data centre in nearby North Makarewa.

Councils and government officials have been briefed on the Datagrid proposal which also has the backing of Meridian Energy.

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Southland District mayor Gary Tong says the council hasn’t been asked to assist Datagrid but has been briefed and is very supportive.

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Tong said “a considerable number of people” would be needed to build the infrastructure.

Even though the data centre would only need about 25 staff to operate once it was complete in 2023, it was “all progress”, he said.

“Those 25 people will be 25 families hopefully, all with connections to somewhere in Southland.”

Invercargill would become one of NZ’s best connected cities if the Datagrid investment comes to fruition.

Invercargill would rival Auckland for international internet connectivity if the project succeeds, and Tong said the main economic benefit for the region might be the resilience that would bring.

“It is not just around the data centre but what could tail on to that – the opportunity to bring people to Southland to work at a distance.

“It is happening now, but to have this resilient high-speed connectivity to the world is the biggest thing.”

Queenstown Lakes district mayor Jim Boult said he was very keen to see the Datagrid investment go ahead.

The city’s economic base had been tourism and construction but Covid had accelerated the council’s effort to build up new industries, he said.

Queenstown had always had a strong involvement in the movie industry and a permanent film studio in the district was now a real possibility, he said.

Datagrid co-founder Remi Galasso is convinced data centres in Southland will be consuming 300MW to 400MW of power within 20 years.

“We are interested in education and ‘medical tourism’ with a Southern Cross hospital being developed, but ‘tech’ is probably where we see the biggest opportunity in the future,” he said.

“We have had a number of discussions particularly with US-based companies which see the advantage in having an office in our part of the world to attract bright young people to work for them.

“What an opportunity it would be to say ‘come and work for us and you’ll spend two or three years in the best part of the world’ with all the things we have to offer for young people.”

Boult agreed that now council leaders in the region were no longer bound by confidentiality it would make sense for them to meet to discuss how they could collectively make the most of the Datagrid opportunity.

“These things are about widespread upside for a number of areas so we are very keen to have those discussions.”

Tong said Southland District Council hadn’t been asked by Datagrid for any specific support so far.

“We have just been asked to have it in mind regarding what may or may not be required in terms of building consents and resource consents.”

The new subsea cables would require a two nautical mile-wide no trawling and anchoring zone off a section of Oreti Beach.

Tong said that wouldn’t trouble him.

“These no trawling, no anchor zones are throughout the world. As an owner of a boat myself I would have no issue with having an area you can’t go.”

Galasso has suggested an internet cable could be laid to Stewart Island, the Chathams and the New Zealand and US bases in Antarctica as an add-on to the project.

Antarctica NZ chief executive Sarah Williamson indicated that would be welcome

“At the moment the internet connection at Scott Base is slow, rather like a dial up connection.

“We would be enthusiastic about any project that could increase our internet speed and help our scientists get their data to and from Scott Base more easily.

Datagrid would need about 100MW of power supplied by Meridian and would be marketed to US internet giants as a facility they could use to serve customers in Australia and New Zealand.

At the moment most of their regional data centres are based in and around Sydney.

Galasso said he was convinced Datagrid would “just be a start” and that within 20 years, data centres in and around Invercargill – not just his own – would be consuming 300MW to 400MW of electricity.

That would be equivalent to up to half of the peak generating capacity of the Manapouri hydro scheme.

”You have companies like Google announcing that by 2030 they will use only green power for their data centres,” Galasso noted.

”In Victoria and New South Wales it is not going to be easy to find hundreds of megawatts of green power.”