Datagrid Buys Kit for Giant Southland Substation

Datagrid has locked in the equipment needed to build a substation that will power what it says will be New Zealand's largest AI data centre, on its Southland site.

The company has signed a pre-purchase agreement with grid owner Transpower New Zealand covering four high-voltage power transformers, associated bushings, and other long-lead items. The transformers will be manufactured by Egyptian firm Elsewedy Electric. Ordering this equipment now — well ahead of construction — is the critical scheduling move; transformers of this scale take years to build and deliver.

The substation will tap into the existing 220kV transmission lines running between Manapōuri Power Station and Tiwai Point, delivering up to 360 megavolt-amperes of renewable electricity to the planned data centre. One of the four transformers will serve as a dedicated backup, meaning full capacity can be maintained if any unit goes offline.

Datagrid founder and chief executive Rémi Galasso said the deal was a turning point for the project. "Securing the grid connection equipment for our new GXP is a major milestone for Datagrid. We appreciate the professionalism of the Transpower team in working through the connection process with us. It is great to work together as Team New Zealand, willing to position New Zealand as an international digital player in this highly competitive AI infrastructure game."

Transpower chief executive James Kilty said the grid company is keeping a close eye on the electricity demands a project this size will place on the system. "Transpower is carefully managing projects that require significant electricity such as Datagrid's to ensure that as they connect there is sufficient capacity on the grid to deliver the electricity and sufficient generation available to supply it. While detailed design for the substation is ongoing, procuring these transformers which are long-lead items helps Datagrid meet its planned timeline, which is targeting substation commissioning in late 2027."

Elsewedy Electric group chief operations and strategy officer Abdulrahman Elsewedy said the project pointed to something bigger for New Zealand. "Data centres are becoming the backbone of the digital economy, and meeting their growing energy needs will require trusted partners with both global scale and local commitment. We are proud to support Datagrid in a project that showcases New Zealand's potential to become a world leader in sustainable data computing. Through our global manufacturing network, we have the capability to meet rising demand across international markets while delivering with speed, reliability, and confidence. Together, we are not only building infrastructure for today, but creating the foundation for a more connected and sustainable future."

Datagrid says its Southland facility will be carbon-neutral and hyperscale, running on the region's renewable energy. If the substation commissioning target of late 2027 holds, the project would move from paper to power in a little over a year.