Meridian voices doubt over Southland data centre after Remi Galasso quits venture

Wednesday, 1 March 2023

Datagrid last year revealed the intended location for its Southland data centre between Taylor Rd and Flora Rd East in Makarewa (video first published in March).

Meridian Energy has voiced doubts that a huge data centre will be built in Southland, following the departure of entrepreneur Remi Galasso from the company backing the technology venture.

The power giant’s scepticism is likely to come as a blow to local politicians and business leaders who have been hoping the Datagrid data centre will form part of a $1 billion-plus project to position Southland as a cheap, “green” hub for dishing up cloud computing services in New Zealand and Australia.

Meridian chief executive Neal Barclay noted on a conference call to analysts and investors on Wednesday that a land use consent application had been lodged for the data centre in October.

But he went on to note that Galasso, the founder of Datagrid and the “apparent passion behind the concept” had left its Singaporean backer BW Group at the end of January.

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“So it's fair to say our confidence in that project is diminished,” he said on the conference call.

Barclay’s comments appeared to come as surprise to BW Group.

Ludovic Hutier, the chief executive of its BW Digital division, who succeeded Galasso in January, said the Southland data centre and BW’s planned investment in its proposed Hawaiki Nui submarine internet cable connecting the South Island to Asia and Australia remained its primary focus.

“These type of infrastructure projects are by nature challenging, capital-expenditure intensive and long to come to fruition, but both Hawaiki Nui and Datagrid remain on track and are progressing as planned,” he said.

Meridian agreed in principle in 2020 to provide power to Datagrid.

That was at a time when it was racing to find alternative or additional customers for electricity from its Manapouri hydro scheme in the event that the Tiwai Point aluminium smelter closed.

Meridian Energy chief executive Neal Barclay (above) described Remi Galasso as the passion behind the Datagrid project.

Galasso’s vision has been that Datagrid would connect to the world via the 22,000 kilometre Hawaiki Nui cable which would have landing points in Invercargill, Dunedin, Christchurch, Los Angeles, Singapore, Australia and Indonesia.

BW inherited that plan when it acquired Hawaiki.

The Hawaiki Nui cable appears even more central to Southland’s hopes of becoming a centre for data storage and cloud computing.

Hawaiki Nui appears to have missed some milestones but to date there has been no suggestion from BW Group that it might not proceed.

Otago University agreed in June to become an anchor tenant of the Datagrid data centre.

It described that at the time as a strategic agreement that would pave the way for the university to become a key customer of the country’s “first fully carbon-neutral hyperscale data centre”.

“We still have a strategic agreement that paves our way to becoming an anchor tenant in the Datagrid datacentre in Southland, subject to a mutual agreement,” the university’s information technology services director Mike Harte said in the wake of Barclay’s comments.

Announcing his departure from BW Group in a LinkedIn post in January, Galasso said he wished BW great success developing Hawaiki Nui and Datagrid but said it was time for him to close “an incredible chapter in my professional life”.