The Government is working on a "compact" setting rules for hyperscale data centre operators wanting to build locally, with Prime Minister Christopher Luxon saying large facilities will need to bring additional power generation.
It follows a call from the Greens to impose a one-year moratorium on consents for new large-scale "AI data centres", which have been divisive in communities locally and abroad.
Luxon said today he had directed Economic Growth Minister Nicola Willis and the Department of the Prime Minister and Cabinet to develop a set of principles, and that the Ministry of Business, Innovation and Employment had also been engaged.
He said the Government wanted to involve energy companies, data centre operators, and other interested parties in shaping the rules.
Party co-leader Chlöe Swarbrick said a freeze was not a ban, as a "one-year pause gives us time to get this right, while National leader Christopher Luxon called it "alarmist". (Source: 1News)
"I want to be able to get all the interests that are in that space to come back with some sensible, common-sense rules. Essentially, a compact that we would actually say: 'This is the deal by which you come into New Zealand if you want to build out a data centre'."
A new 78,000 square metre AI-oriented data centre planned for Makarewa has drawn controversy with locals. Using up to 280 megawatts of power, the facility was expected to be second only to the Tiwai Point smelter for industrial power usage nationally.
Speaking to media today, Luxon said large-scale data centres would need to demonstrate "additionality" to the electricity system, meaning they could not simply draw from the existing grid without contributing new generation capacity.
"It depends a little bit on size as to what would be needed in terms of additionality. But certainly large ones — absolutely — we need to make sure that there is additionality."
The Prime Minister said he had discussed the issue with Australian Prime Minister Anthony Albanese several months ago, noting the importance of the two countries presenting a consistent framework to global investors considering the region.
"If you're looking at our part of the world, Australia and New Zealand, I think having some alignment between the two countries is kind of important in this space," Luxon said.
Albanese had recently announced Australia would create new legal obligations for hyperscale data centres to underwrite additional renewable power generation, with a focus on not increasing power prices for consumers.
His government had been courting artificial intelligence giants such as Anthropic, makers of chatbot Claude, into making investments to the tune of NZ$25 billion in Australia.
The $1.6 trillion company, the most valuable of Silicon Valley AI startups, registered a local firm under the name "AI Infra NZ", BusinessDesk and The Bottom Line reported last week.
A group of university students took part in an experiment with ChatGPT. (Source: 1News)
The PM's remarks today went further than his response yesterday to the Greens' call for a moratorium on hyperscale data centre consents, which he had dismissed as "alarmist".
While still rejecting a moratorium, Luxon acknowledged today the sector had begun to lose social licence in parts of the world, particularly North America. But, "putting a one-year moratorium in place sends a message to global investors," he said.
"Sitting in Canada, thinking about, you know, where I might make that investment of the 195 countries that are out there, we want New Zealand to be a competitive position for that for that capital to come here," Luxon said.
"We can find quite good bipartisan support for that going forward, but the answer is not to turn off investment before it's even shown up in the country."
Greens say there must be 'national conversation'
Greens co-leader Chlöe Swarbrick announced the one-year pause pledge on Q+A over the weekend, framing it as a chance for a "national conversation" rather than a ban.
Swarbrick spoke to Q+A about the Greens' policy to pause new AI data centres consents for a year. (Source: Q and A)
"This is not a ban on data infrastructure. It's a pause on the most resource-intensive developments while New Zealanders get a say on what conditions they should meet," she said in a media release accompanying the announcement.
"Let's take a moment, let's have a common-sense think about who they're actually benefitting, and whether New Zealanders want them in the first place."
She said the pause was not a ban, as a "one-year pause gives us time to get this right".
Swarbrick said the country had never been asked whether it wanted the facilities at all, stating that New Zealanders were entitled to "a national conversation".
"If we are going to let these things be built, we should at least understand who is benefiting and ensure we protect our natural resources and communities. That's why the Greens are calling for a one-year pause, to allow intentional regulation to be developed."
Supporters of further investment argue New Zealand is unusually well placed to win a share of the fast-growing global market, pointing to renewable energy opportunities, cooler climate, fibre connectivity and stable business environment.
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