South not agitated by Meridian's data centre doubts

Monday, 6 March 2023

A design mock-up of the planned Datagrid data centre.

Meridian’s “diminished’’ confidence that Datagrid’s $1 billion-plus project for a data centre does not appear to have spooked Southland commentators.

Meridian has agreed in principle to provide power for the project to position Southland as a green hub for cloud computing services in New Zealand, Australia and beyond.

But its chief executive Neal Barclay told investors and analysts last week that the power company’s confidence in the project had diminished in light of the recent departure of its champion, Remi Galasso, from the Singaporean backing company BW Group.

However, Galasso’s replacement at BW Digital, Ludovic Hutier, has said the data centre and the associated Hawaiki Nui submarine internet cable remained its primary focus and were on track.

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Meridian’s comments, rather than Galasso's departure – he wished the company well with both projects – have been what has raised the eyebrows of southern interests.

Invercargill MP Penny Simmonds said she thought Meridian’s concerns were premature, particularly in light of the assurances from Datagrid and BW Digital.

“It seems everything is in line for this development, which effectively harnesses the country’s renewable power and applies it towards sustainable digital infrastructure and connectivity for the country.’’

The project for a carbon-neutral data centre on a 43-hectare site at Makarewa had tremendous potential for Southland, Simmonds says, to create a global IT hub leading to employment during construction and positioning the province at the forefront of this technology.

“Based on the significance of this project for our province, I would hope that Meridian fully investigates its misgivings before making any further decisions.’’

Datagrid has lodged a consent application for the centre, and Otago University has agreed to come on board.

Asked if its own confidence in the project had in any way diminished, the university simply asserted the status quo, with information technology services director Mike Harte saying only: “We still have a strategic agreement that paves our way to becoming an anchor tenant in the Datagrid data centre in Southland, subject to a mutual agreement.’’

Southland’s regional development agency Great South is also showing no particular signs of agitation.

Strategic projects manager Steve Canny said it had been involved in the early stages, involving the selection of a suitable site in the Makarewa environment, but while Datagrid was pressing on with the consent process, there hadn’t been any week-to-week or month-to-month involvement.

“But our understanding was that … when the project got to the next phase of activity, there would be greater engagement across the board,’’ he said.