New Zealand has the opportunity to become a sustainable data centre hub, attracting billions in investment, creating high-value jobs, and securing our place in the global AI economy. But to seize it, we need to tackle one of our biggest challenges: high energy costs.

This discussion paper explores how we can leverage our renewable energy mix, cool climate, and strong privacy laws to become a data centre hub in the Asia–Pacific.

Why this matters

Artificial Intelligence is transforming the world, but the servers that make it possible consume staggering amounts of energy. Data centres already use 2% of global electricity, ten times New Zealand’s annual generation, and demand is set to double by 2026.

Major players like Microsoft and Amazon Web Services are already investing billions here, drawn by our:

• Nearly 90% renewable energy mix
• Temperate climate that lowers cooling costs
• Strong privacy protections and political stability

But these advantages will count for little if we can’t deliver abundant, affordable power.

Key findings from the paper

• The opportunity: With the right policy settings, New Zealand could generate high-value jobs, attract foreign direct investment, and cement its reputation for sustainability.
• The challenge: Our electricity prices are among the highest in the Asia–Pacific, we face limits on renewable expansion, and our international connectivity has limitations.
• The solution: Strategic investment and reform to double geothermal generation, explore emerging technologies like supercritical geothermal and Small Modular Reactors (SMRs), streamline consenting, and expand connectivity.

The window is closing. If we don’t act now, other countries will take the lead.

Our recommendations

1. Double geothermal generation to provide reliable, low-carbon baseload power.
2. Explore emerging energy sources such as supercritical geothermal and SMRs for long-term supply.
3. Streamline consenting for energy and infrastructure projects.
4. Incentivise investment through public–private partnerships and targeted tax measures.
5. Expand connectivity with new submarine cables and satellites while adding redundancy.

Read the paper to see how New Zealand can position itself at the heart of the AI economy.