Datagrid plans $500m hyperscale DC and two new subsea cables

Datagrid plans $500m hyperscale DC and two new subsea cables

Datagrid CGI data centre.jpg

Datagrid New Zealand has announced plans to build a new $500 million (A$700 million) hyperscale data centre in South Island, New Zealand.

The new facility, to be located in North Makarewa in Southland, will enable tech giants like Google, Amazon, Apple, Facebook and Microsoft, to serve close to 20 million customers across eastern Australia and New Zealand.

The project has already garnered input from Meridian Energy which will deliver 100MW of power from its 800MW Manapouri hydro scheme to the Datagrid site.

Born the brainchild of Hawaiki Cable founder, Remi Galasso and CallPlus co-founder Malcolm Dick, the aim of Datagrid aims to replicate the success of other of the Icelandic data centre industry, which is known for its cool climate and cheap sustainable power to become of the biggest data and cloud hubs globally.

Due to agreeable weather in the region, with an average annual temperature of 9.8 degrees, Datagrid’s cooling overhead would be halved.

“We will save 15% of the power, which means we will save 15% of the cost,” said Galasso.

Once operational in 2023, Datagrid will become the country’s first hyperscale facility with a footprint of 40,000 sqm and can be built in 10,000 sqm tranches. US data centre design company Aecom has been appointed as the project’s technical consultant and the site will reportedly only need 25 staff to operate.

Previous data centres have been considered in the past but fell flat due to the lack of international connectivity, Datagrid plans to get around this with the development of two new subsea cables.

The first will be a 2900km system connecting Invercargill, New Zealand to Sydney and Melbourne, Australia.

The second will connect to Hawaiki Cable’s landing point at Mangawhai Heads, north of Auckland. It will then have onward connectivity to Auckland, Wellington and Christchurch.

There is also the potential for branch cables to the Chatham Islands, to connect not only its citizens but also the Rocket Labs’ satellite-tracking station, as well as to Stewart Island and the US and New Zealand bases in Antarctica.

The plan is for the subsea cables land along the 26km stretch of Oreti Beach, just outside Invercargill.

“We are talking to fishermen because we need to ask for a two nautical mile-wide zone where they could not anchor or do any trawling, to protect the cable,” said Galasso.

Of the $500 million price tag, $100 million has been allocated to the construction of the two cables and the remaining $400 to be spent on the new hyperscale data centre.

Still in the early stages of development the project is still contingent upon the securing of one of the big US cloud companies coming onboard as an anchor tenant. According to Galasso talks were taking place soon and “hopefully within the next 12 months we will sign an anchor tenant and then confirm the project”.

The project also plans on being funded through a combination of equity and debt from infrastructure investors in New Zealand once an anchor tenant is secured.

“Obviously if we can’t raise 100% in New Zealand, then we will go to Australia and the US,” added Galasso.

Both Galasso and Dick plan on financing the project’s preparatory work themselves.

 “The whole project needs quite significant funding from the various parties that will be involved. There is huge interest in the project but it is early days,” said Dick.

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