Residents near the site of New Zealand's first planned AI datacentre are calling for more transparency about the project, particularly regarding its massive electricity and water consumption and potential noise pollution. Singapore-based Datagrid has secured approval to build a NZ$3.5bn (US$2bn) AI datacentre on a 49-hectare site in Makarewa, just north of Invercargill. Construction is slated to begin this year, with operations expected by 2028.
Project Details and Local Concerns
The facility will be used for AI training, processing, and data storage, serving global AI and cloud providers. Datagrid also plans to build a high-speed internet cable between Invercargill and Australia. The centre will become New Zealand's second largest electricity user, after the Tiwai Point aluminium smelter, consuming 280MW of power.
Local authorities have hailed the project as a regional win, citing job creation and faster internet. The company claims about 1,200 jobs during construction and 50 permanent positions upon completion. However, Angus Dowell, an economic geographer studying datacentre construction, noted "a lot of red flags." He stated, "[The centres] provide short term economic benefits in the form of construction, but they're very, very low employers long term, and so the long term benefits to local economic development are just not there, they don't stack up."
Community Opposition and Environmental Worries
Residents are increasingly concerned. Kelly Blomfield, chair of the Southland Sustainable Resource coalition, said, "Locals down here kind of feel like we've had our region sold out from underneath us." She added, "I think that most people's actual concern is that we don't find out anything until it's done," noting unsuccessful attempts to gather information from Datagrid.
Makarewa resident Amanda, who requested anonymity, expressed alarm after learning more about similar projects overseas. She worries about water and power use, the potential operation of 84 diesel generators during power shortages, and round-the-clock noise and light affecting the community and farm animals. Environment Southland regional council reports show Datagrid has approval to discharge air contaminants from up to 84 diesel back-up generators, draw up to 604,800 litres of groundwater daily, discharge up to 5,000 litres of treated wastewater per day, and remove a nearby wetland. While direct neighbours were consulted, the broader community was not, and anti-datacentre sentiment is growing.
Government Push for AI Hub
The centre is part of New Zealand's strategy to attract foreign investment and build datacentres. Invest New Zealand aims to secure NZ$25-30bn in foreign investment for datacentres and AI infrastructure. The agency touts New Zealand's renewable energy, available land, cool climate, digital connectivity, skilled workforce, competitive pricing, and rule of law as compelling opportunities. A Boston Consulting Group report claims the industry could "unlock up to $70bn of economic activity" over the next decade.
Blomfield feels New Zealand has entered the AI datacentre race without public consent: "No one asked us if we want to be in that race." She added, "People are starting to understand the scope of it, and people are starting to say: I don't want this in my back yard."
Company and Government Responses
Datagrid did not respond to requests for comment, but CEO Rémi Galasso previously dismissed concerns about water and power use, citing Southland's cool climate and long-term renewable energy arrangements. Invest New Zealand's CEO Robert Wall was unavailable for an interview. Dowell called for greater scrutiny, stating, "It's fair for us to look at other places in the world and see the environmental impacts of datacentres, the highly asymmetrical distribution of value as part of the big tech AI economy, and say: we need to know more. We should demand more, because there's a lot at stake."
