The OIO has approved Amazon Data Services New Zealand Limited (ADS, United States of America 24%, Various 76%) buying a freehold interest in approximately 0.2018 hectares of residential land at 77 Fred Taylor Drive, Westgate, Auckland, from W&H Properties Limited. The price paid was suppressed.
To quote the OIO: “The Applicant is a New Zealand incorporated company, ultimately owned by Amazon.com, Inc., a publicly traded company in United States of America. The Applicant owns and operates the information technology (IT) infrastructure that currently underpins the Amazon Web Services Edge location in New Zealand. Presently, the Applicant is acquiring residential land to establish stormwater drainage infrastructure which is required to enable the construction of a data centre facility on adjoining land, already owned by the Applicant. Consent was granted as the Applicant met the investor test criterion and the investment is likely to meet the non-residential use test”.
There is a story behind this purchase of a tiny sliver of Auckland land to “establish stormwater drainage infrastructure” by one of the world’s biggest transnational corporations. In March 2022 the OIO approved the same Amazon company to establish “a business, being a cluster of data centres (Region) in Auckland. Acquisition of property in New Zealand used in carrying on business in New Zealand”. The vendors were Various data centre service providers and property owners with assets and land in New Zealand. The price to be paid was between $250 million and $350 million.
At that time the OIO wrote: “The Applicant is a New Zealand company ultimately owned by Amazon.com, Inc., a publicly traded company in the United States of America. ADS NZ owns and operates the IT infrastructure that currently underpins the Amazon Web Services (AWS) Edge location in New Zealand”.
Plans For A Cluster Of Data Centres
“The Applicant proposes to establish a cluster of data centres in Auckland (called a ‘Region’). This would allow customers purchasing AWS cloud services to select one or multiple data centres in New Zealand, rather than overseas, to store or process their data and run AWS applications and services. The Region places AWS’s portfolio of services including compute, storage, database, and other services closer to end-users, ensuring ultra-low latency access to applications running locally. Additionally, the Region will enable AWS customers with data residency preferences to securely store data in New Zealand”.
“The data centres are expected to be operational in 2024. To launch and operate the Region, the Applicant will, among other activities, enter into service agreements with third party operators of facilities in New Zealand; and purchase from offshore suppliers IT equipment for installation in the facilities. The Applicant has satisfied the investor test and national interest test criteria”.
“Separately, Amazon cited a study saying its data centre zone would add $10.8b to New Zealand’s gross domestic product (GDP) over a decade and a half”. The tech giant first said the facility would open by the end of 2024, but construction faced extended delays because of drainage issues raised by Auckland Council (the Council told the Herald the drainage hold-up was specific to the parcels of land and not related to the site’s function as a data centre)”
Microsoft First Off The Mark
“Amazon says it will be completed by the end of this year (2025), implying a much more accelerated construction schedule than neighbouring data centre projects. The firm says the local ‘Region’ (as it calls a cluster of at least three independently-powered data centres) will boost performance of its AWS cloud and AI services, with early customers including One NZ, Vector and Datacom (which also maintains its own data centres)”. West Auckland is becoming home to a number of data centres’ clusters owned by some of the world’s biggest digital transnational corporations. In May 2020 Prime Minister Ardern announced that Microsoft was going to build a data centre in that part of Auckland.
The OIO approved this in August 2020 with a further approval in February 2023.
Water And Power Hogs
The OIO’s December 2024 approval for Amazon’s “stormwater drainage infrastructure” is significant. “Historically, data centres have been water and power hogs, using tens or even hundreds of millions of litres of water per year for cooling. But the most recent designs use air-cooling and a closed system that recirculates one lot of water. ‘Hyperscale’ or super-giant data centres are described by how many megawatts of power they consume at peak usage”.
“‘Based on the data centres already connected, and confirmed plans agreed with us in coming years, we could see the total capacity required for data centres reach around 500 megawatts (MW) over the next five years’, energy distributor Vector said in comments supplied to the Herald late in 2024. That’s the equivalent power demand of 200,000 homes and represents a huge addition to the city’s existing load, which can peak at up to 1700MW”.
“In the US, there are plans to bring shuttered nuclear power plants back online, and build new ones, to deal with the artificial intelligence-fuelled boom in data centres. Here, authorities say the new data centres will slowly build up to peak capacity and that enough new power will be generated from under-construction or planned new plants to accommodate them. Microsoft and Amazon both say they’re committed to renewable power and helping to fund new generation”.
“In Amazon’s case, it signed a deal with Mercury Energy for supply of 50% of the electricity from its soon-to-be-completed 222MW Turitea South wind farm, which will be used to power its data centre cluster at Westgate. Like Amazon, Microsoft wouldn’t comment on its Auckland facility’s number of servers, or peak power use, but the tech giant said it had signed ‘a ten-year contract with Microsoft supported by Contact Energy’s investment decision to construct the Te Huka 3 geothermal power station, which can generate 51.4MW of reliable and renewable generation throughout the year’. Microsoft said its Auckland data centre would use less than Te Huka 3’s 51.4MW annual output” (NZ Herald, ibid).
The full December 2024 Decisions are at
QS NZ Infrastructure Equity Trust, QS Power Trust No.2, QIC Trust No.1, QIC Trust No.2