At a glance
- Datagrid told a Southland Business Chamber audience in Invercargill on 18 August 2026 that its Makarewa campus will need fewer than 34 diesel backup generators, against the 84 its planning approvals allow.
- The company expects to draw under 66 million litres of water a year, primarily rainwater, while its approval allows 220 million litres of groundwater.
- Datagrid says a change to its approval would carry the lower generator number. Until one is granted, the enforceable limit stays at 84.
- RNZ reported that Southland District Council expects to decide by 5 September 2026 whether to review the conditions attached to the approvals.
- Datagrid says the approved figures were set for the worst case, before it knew which customer would take the campus.
Datagrid is building what it calls New Zealand's largest data centre project on a 49-hectare site at Makarewa, north of Invercargill. On 18 August 2026 the company gave Southland business leaders the water and generator figures it says the finished campus will need. Its planning approvals allow 220 million litres of groundwater a year and 84 diesel backup generators.
Datagrid now expects to draw under 66 million litres of water a year and to need fewer than 34 diesel generators, and head of technology Benjamin Black said a change to the approval would carry the lower generator number. The water and generator figures were reported by RNZ and The Southland Tribune on 18 August 2026.
| Item | Limit that applies | Datagrid's stated design |
|---|---|---|
| Water | 220 million litres of groundwater a year | Under 66 million litres a year, primarily rainwater |
| Backup generators | 84 diesel units, 2.5 to 3MW each | Fewer than 34 |
| Night noise at neighbouring homes | 40 decibels at night, as cited by Datagrid | Designed to sit below it |
Source: Datagrid statements to the Southland Business Chamber, 18 August 2026, as reported by RNZ and The Southland Tribune. The two water figures are not measured on the same basis. The approval covers groundwater only, while Black described the 66 million litre figure as primarily rainwater, with groundwater still under investigation.
The 11 March approvals, granted without public notification
Black said the approved numbers describe the largest effect the campus could have. "The process of consenting means that initially we have to come up with what's called the maximum set of effects, assuming the worst case for everything," he said. "That's how you end up with some pretty terrifying numbers but as we've focused in on a specific application with a specific tenant, it's allowed us to really narrow down the set of effects."
On 11 March 2026 the approvals came from Southland District Council, Invercargill City Council and Environment Southland, the regional council that regulates water in the province. They were granted without public notification, so planners decided them on the application alone, with no submissions from the wider community.
The Green Party sought a one-year pause on approvals for new AI data centres in July 2026. Prime Minister Christopher Luxon rejected it and directed officials to draft a set of principles for the sector.
84 generators approved, fewer than 34 in Datagrid's stated design
Datagrid was approved for 84 large diesel generators rated at two and a half to three megawatts each, for use when grid supply fails. Black told the meeting the anticipated design would need fewer than 34, and that Datagrid would seek a resource consent variation, which alters the conditions on an approval already granted, to carry the lower number. The company has given no date for lodging one.
Black said the Southland District night limit for neighbouring homes is 40 decibels and that the campus will sit under it. He said the equipment will be enclosed inside 12-metre buildings fitted with sound-absorbing linings and barriers. Datagrid says the earthworks that began on 18 August 2026 will raise a six-metre bund from the site's own topsoil, and that it will cut the campus's noise and visual footprint.
The water permit and Datagrid's expected draw
The water permit from Environment Southland allows a take of about 600,000 litres of groundwater a day, which comes to 220 million litres a year. That daily figure was reported from the consent record in July 2026.
Black put the expected draw at under 66 million litres a year, and said most of it will be rainwater. "And just to be clear, this water is rainwater, primarily. We've looked at potentially taking some groundwater for this; it's still being investigated," he said. He added that rainwater harvesting alone will not supply the full 66 million litres.
Black puts the campus at 350MW
Black told the room the campus is being designed to support about 350MW, and that Datagrid has no plan beyond it: "There is no growth plan from that. There is no stage two, or phase two, whatever you might be concerned about. There is no gigawatt."
DataCenterDynamics reported the March 2026 approvals as covering a 280MW campus. The New Zealand Herald reported on 12 August 2026 that Rémi Galasso, Datagrid's founder and chief executive, said the initial 280MW could be expanded to 1GW, with plans yet to be finalised and the outcome depending on the capital raised. Black gave the chamber about 350MW on 18 August 2026.
Black said buying 350MW for 15 years had given generation companies a reason to build, and pointed to Mercury as the example: "Between now and 2030 Mercury alone is going to add more than 1.5 gigawatts of sustainable capacity." Mercury holds a 140MW power purchase option with Datagrid and has committed NZ$506 million to the 192MW Puke Kapo Hau wind farm west of Dunedin. reNEWS reported on 19 August 2026 that the wind farm is positioned to serve South Island demand, including Datagrid's.
Conditions, monitoring and a review decision expected by 5 September
The Southland Sustainable Resource Coalition has asked for a review of Datagrid's approvals, citing the project's environmental monitoring conditions and how much low-frequency noise the campus would produce. Southland District Council is assessing whether to start one, and RNZ reported on 18 and 20 August 2026 that the council expects to decide by 5 September 2026.
Under the Resource Management Act the council serves notice of the conditions it intends to review and its reasons. The holder of the approval then has 20 working days to propose replacement conditions, and the council decides, with appeal rights to the Environment Court. Quality Planning, the practitioner guidance published for New Zealand councils, says the council has to consider whether the activity will still be viable once a condition is changed.
Galasso told the 18 August briefing that Datagrid turned down the government's fast-track route. "They proposed to me the Fast-track process and said we can give you the resource consent in six months," he said. "I said, 'thank you, but no thank you. I will talk to the councils and we'll do the classic resource consent process.'"
Black said the project carries four checks: legally binding conditions, metered and reported water use, a formal complaints process, and the council's power to review those conditions.
What to watch
A variation would have to be lodged and granted before the lower generator number binds Datagrid. The 220 million litre water take stays as approved.
Galasso said monthly public meetings will run at the Makarewa Country Club. The company is targeting substation commissioning for late 2027 and a campus opening in 2028. In August 2026 it pre-paid Transpower, the national grid operator, for the connection equipment.
Datagrid's own most recent release, published on 18 August 2026, covers the start of earthworks. The lower water and generator figures have not appeared in any Datagrid release, or in any application to the councils. They stand as statements made to a business audience on 18 August 2026.