Data centres are on track to consume 4 percent of the world's electricity by 2026. File photo. Photo: 123rf
Building energy-hungry data centres is a boom industry in New Zealand, with international companies keen to reduce their climate impact by using this county's renewable electricity.
An analysis by business consultancy EY concluded attracting data centres could be good for New Zealand, if a wave of investment was structured so that it boosted the country's electricity infrastructure, among other things.
But with the energy network already stressed, there are calls to make sure any premiums data companies pay to access clean energy here are directed to growing wind, solar and other renewables.
The International Energy Agency says data centres are on track to consume 4 percent of the world's electricity by 2026, and CDC, Microsoft, Amazon and other big players have expressed interest in building more of them here.
Toitu Envirocare chief science adviser Belinda Mathers says New Zealand's largely renewable power - and ambitions to increase it further - is a big draw card.
"Owners of data centres and developers of data centres are looking for global locations where they can minimise their own impacts," she said.
"Data is a really significant proportion of the value chain emissions of many office-based organisations, though it's not something thats widely reported."
According to that EY report, a ChatGPT text search uses about 10 times the power of a Google search, which helps explain why AI is helping drive data centre expansion.
But there is also increased interested in the climate impacts, with companies increasingly having to disclose not only their direct carbon emissions, but also those of their suppliers - like the supplier of their data storage.
If a company's data is stored in a centre powered by renewable energy, that reduces the emissions of the business at the end of the chain, whether it is a government department or a supermarket.
Data centres are increasingly selling themselves on sustainability, as well as security.
One example is CDC, which has embarked on a major expansion, backed by infrastructure investor Infratil.
CDC alone has this year announced 200MW of additional construction on top of the 400MW already underway in Australia and New Zealand. That is enough to dwarf the facilities it currently operates in Auckland and elsewhere.
In a high-growth scenario, New Zealand government estimates say data centres could suck up as much electricity in 2030 as is used today by the country's current biggest power user - Tiwai Point aluminium smelter - equal to over 7 per cent of the country's future supply.
New Zealand's grid is currently about 85 percent renewable-powered, and that's expected to rise into the 90s with the growth of solar and wind.
But when renewable supply is tight, power generators turn to coal - with impacts on New Zealand's electricity emissions.
A common way for data centres to lower their reported climate impacts is paying a premium to an electricity company, in return for a certificate saying they received 100 percent renewable power for their operations.
But while the generator itself might be producing only renewables, in reality the electricity is drawn from the national grid with its mix of wind, solar, hydro, geothermal, gas and coal.
Renewables supply most of the baseload.
But when demand gets too high, typically on a winter's evening, and the grid as a whole runs short of renewable power, other generators have to burn coal to compensate.
Buyers of these green certificates say by that supporting renewable generators, they are supporting New Zealand's clean power supply.
But the certificates themselves do not always come with any guarantee that the money will be used to grow supply or reduce emissions - allowing the generator to use the money however it wants.
Mathers said data centres selling their green credentials based on these kinds of deals should be looking closer, and demanding that any premium they pay either grows New Zealand's supply of renewables or reduces peak power demand, either of which would reduce emissions.
"Really do ask those questions, about what real impact is coming from that certificate or arrangement that entered into, Those funds need to be ringfenced for things that have impact, whether that be construction of new renewable, significant upgrades of existing renewables, or other ways to reduce peak demand on the grid," she says.
"I know one of the generators is using the funds for electric vehicle charging stations that otherwise wouldn't have been there. Another is using the funds for significant upgrades to generation facilities...so they can create more electricity for the same amount of water."
Several data centres, including CDC, do incorporate added requirements.
Toitu - which certifies CDC's emissions claims - requires its clients to meet certain criteria before they can rely on renewable certificates to claim zero emissions from their electricity use.
Some companies are still claiming low- or no-emissions electricity, based on contracts with no strings attached, however.
One of these is tech company Datacom, which uses electricity from the grid but says it is "backed by renewable generation" based on a certificate from Mercury Energy.
However Mercury told RNZ that it does use all the money for renewable energy initiatives - and Datacom says this was part of discussions when choosing Mercury as a supplier, despite not forming part of the contract.
