Datagrid, Chorus propose submarine cable to Australia

Friday, 31 January 2025

Datagrid plans to develop a new $3.5 billion, carbon-neutral hyperscale data centre on its 43ha site at Makarewa near Invercargill.

Datagrid has signed a memorandum of understanding with Chorus to explore a trans-Tasman subsea cable named Tasman Ring Network, to provide greater internet capacity and resilience to New Zealand.

The company has also joined the Major Electricity Users’ Group, which advocates for reliable, affordable, and renewable electricity supply.

Datagrid plans to develop a new $3.5 billion, carbon-neutral hyperscale data centre on its 43-hectare site at Makarewa near Invercargill, and position Southland as an international location for AI training.

The company has applied to have consents approved under the Fast-Track Approvals Act.

The parties have entered into an exclusive Memorandum of Understanding to develop the Tasman Ring Network that would connect Auckland, New Plymouth, Greymouth, Invercargill, Sydney and Melbourne through high-capacity international transport links.

If sufficient demand is established, construction of the Tasman Ring Network will commence under a joint build agreement, with ready for service expected to be in the fourth quarter of 2027.

The proposed cable would come ashore at Invercargill’s Oreti Beach. (File photo)

With an international capacity of up to 540 Terabits per second, the Tasman Ring Network would be the first dedicated high-fibre-count submarine cable selling capacity between New Zealand and Australia. Four landings on New Zealand’s west coast will greatly improve internet capacity and resilience in New Zealand and provide much needed diversity out of the South Island.

Datagrid chief executive Perrine Dhalluin said the company believed the Tasman Ring is the right vision and right design to make New Zealand an attractive location for hyperscale data centers looking for abundant renewable electricity sources.

“Combined international and domestic connectivity is key to unlock the huge potential of New Zealand and Southland in particular. Together with Chorus we aim to make NZ AI ready - moving from the gigabyte era to the terabyte era,’’ he said.

Chorus’ executive ceneral manager of infrastructure Mike Shirley said the Tasman Ring would hugely improve data centre connectivity in New Zealand and across the Tasman.

The site of the proposed Datagrid data centre in Makarewa, Southland.

The Tasman Ring Project would allow New Zealand to compete in the international AI market and harness the global acceleration of cloud adoption,” he said.

Datagrid had applied to the Southland District Council for resource consent to build the data centre, but the application was on hold due to the National Policy Statement for Highly Productive Land (NPS-HPL) coming into effect at the time the application was submitted, the application said.

Datagrid was also seeking Overseas Investment Office approval to buy an extra 6ha of land next door to its Makarewa site.

It was also announced this week that Datagrid had joined the Major Electricity Users’ Group.

Dhalluin said as the firm became a significant electricity user, access to an affordable and reliable renewable energy supply would be crucial.

“As we grow our operations and renewable energy use in New Zealand, we recognise the importance of MEUG’s advocacy for policy that promotes reliable, affordable, and renewable electricity supply,’’ he said.

Major Electricity Users’ Group executive director Karen Boyes said affordable and reliable electricity was a key input for Datagrid’s business and would ensure its competitiveness in the global data centre market.

“We look forward to continuing our strong advocacy for fair electricity prices and forward-looking energy policy to ensure firms like Datagrid can compete, grow, and create jobs in New Zealand. It highlights the massive economic progress that major electricity users can drive for New Zealand if the conditions are met.”

International consultant Analysys Mason estimated that Datagrid’s project could support gross domestic product gains of up to $3.7 billion annually, and support up to 10,000 jobs through construction and operation of the completed project.

The construction of a new power substation would directly connect the data centre to Transpower’s 220kV high-voltage power lines allowing Datagrid’s data centre park to be supported by up to 280 MW of renewable energy in phase one, with the ultimate objective to reach 1 gigawatt.

*Correction: An earlier version of the story incorrectly referred to the cable as the Te Waipounamu submarine cable. (Amended: January 31, 12.33pm).