Datagrid secures substation kit for Southland AI data centre

Datagrid has signed an equipment purchase agreement for a 360MVA substation for its Southland data centre project. The deal covers long-lead grid connection equipment for what it describes as New Zealand's largest AI data centre.

The agreement with Transpower covers four high-voltage power transformers, associated bushings and other long-lead items for a grid-connected substation to be built on Datagrid's Southland site. Elsewedy Electric will supply the transformers.

The substation is designed to connect to the existing 220kV transmission lines linking the Manapōuri Power Station to Tiwai Point. Datagrid said the installation will deliver up to 360MVA of renewable electricity to its planned AI data centre.

A glossary issued with the announcement said 360MVA is broadly equivalent to about 340MW of delivered power at a typical power factor of 0.95. The company noted, however, that this refers to the capacity of the grid exit point rather than the site's expected power consumption. It added that connection infrastructure is usually sized with headroom above actual demand.

Grid connection

The substation will be built to an N-1 configuration, meaning one of the four transformers will serve as a dedicated backup. This is intended to allow the site to maintain full capacity if one unit is taken offline.

The order secures equipment that can take a long time to manufacture and deliver. Datagrid is developing a carbon-neutral hyperscale AI data centre in Southland and has described the substation as a key step in keeping the wider project on schedule.

Rémi Galasso, Founder and Chief Executive Officer of Datagrid, commented on the agreement.

"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," said Rémi Galasso, Founder and Chief Executive Officer of Datagrid.

Transpower is handling a growing pipeline of electricity-intensive projects and assessing them against available network and generation capacity. The grid owner is responsible for the national electricity transmission system and acts as system operator.

"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," said James Kilty, Chief Executive Officer of Transpower.

Supplier role

Elsewedy Electric, which manufactures high-voltage power transformers, is supplying the units for the project. It said demand from data centres is becoming an increasingly important part of the electricity infrastructure market.

"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," said Abdulrahman Elsewedy, Group Chief Operations and Strategy Officer of Elsewedy Electric.

The Southland project highlights the scale of electricity infrastructure needed for large data centre developments, particularly those focused on AI workloads. Such sites require substantial and reliable grid access, and lead times for transformers and related equipment have become a critical planning issue for developers in several markets.

Southland's appeal for Datagrid rests partly on its access to renewable electricity and cooler climate, which can reduce energy needed for cooling. The planned connection to the transmission route between Manapōuri and Tiwai Point also underlines how former industrial power corridors can become attractive for new forms of digital infrastructure.

Elsewedy Electric said it has annual revenue of more than USD $5.7 billion, employs more than 21,000 people and operates more than 34 production facilities across Africa and Asia, exporting to more than 100 countries.