Datagrid New Zealand and Mercury establish 140MW Power Purchase Option Agreement to drive AI infrastructure growth
Auckland, New Zealand – 18 March 2026 – Datagrid New Zealand today announced the signing of a 140-megawatt (MW) long-term Power Purchase Option Agreement (PPOA) with Mercury, securing electricity price certainty for Datagrid’s next-generation AI data centre platform. The 15-year agreement represents one of the largest single commercial power arrangements dedicated to AI and high-performance computing infrastructure in New Zealand.
The 140MW, 1.2TWh p.a. PPOA will provide a long-term price hedge for Datagrid’s flagship hyperscale campus in Southland, supporting advanced artificial intelligence workloads, sovereign cloud services, and high-density computing operations. 1.2TWh p.a. is equivalent to 3% of national demand.
The partnership supports Datagrid’s commitment to enabling digital infrastructure growth while leveraging New Zealand’s predominantly renewable electricity generation portfolio. New Zealand already generates around 85% to 90% of its electricity from renewable sources and is on track to reach 98%+ renewable electricity by 2030. All electricity generation in the South Island is renewable, positioning Southland as one of the most attractive locations in the Asia-Pacific for AI infrastructure.
Rémi Galasso, CEO of Datagrid, said:
“This 140MW agreement with Mercury is a cornerstone for Datagrid New Zealand. It enables us to offer international AI players a competitive platform powered by renewable energy, natural cooling advantages, and long-term stability in Southland.
In a world of increasing global uncertainty, we see New Zealand evolving into a secure and trusted hub for AI infrastructure, combining sustainable energy, security, and strategic advantages for AI workloads. Datagrid intends to contribute to this vision through the development of New Zealand’s first AI Factory.”
Stew Hamilton, CEO of Mercury, added:
“It’s exciting to support New Zealand’s first AI Factory. Data centres represent a $70 billion economic growth opportunity for New Zealand, according to BCG’s recent Energy to Grow report, with benefits including jobs for locals during construction. This also positively positions Southland and, by extension, New Zealand in this fast-growing sector.
“Having guaranteed customers buying a significant amount of generation means we can continue to invest significantly in new renewable generation for New Zealand, helping meet future demand growth and build resilience.”
Mercury has just completed expansion of its Ngā Tamariki Geothermal Station near Taupō, while stage 2 of its Kaiwera Downs Wind Farm near Gore and Kaiwaikawe Wind Farm near Dargaville are both due to begin generating in 2026. Together the three developments represent $1 billion investment in new renewables. Mercury also has plans to invest $590 million in hydro refurbishment over the next decade.
Datagrid’s 280MW AI Factory project received resource consent approval in March, marking a major regulatory milestone for the development. Construction is expected to commence in June, with full project delivery targeted for 2028. During the construction phase, the initiative is expected to create over 1,200 skilled and technical jobs, delivering meaningful employment and economic benefit to the region.
The development also includes the construction of the Tasman Ring Network, the first international subsea cable to land directly in New Zealand’s South Island. This new digital gateway will significantly enhance international connectivity, resilience, and latency performance, reinforcing the country’s ambition to become a secure and globally connected hub for AI and advanced computing infrastructure.
ABOUT DATAGRID
Datagrid New Zealand is developing New Zealand's first AI factory - a 280MW hyperscale data center campus in Makarewa, Southland, purpose-built for advanced AI, sovereign cloud, and high-density computing workloads. Powered by renewable energy and benefiting from Southland's naturally cool climate, the campus is designed to achieve world-leading power usage efficiency. Datagrid is also developing the Tasman Ring Network, the first international subsea cable to land directly in New Zealand's South Island, connecting Invercargill with major Australian hubs and cutting trans-Tasman latency by up to 50%.
For more information, visit www.datagrid.nz.
ABOUT MERCURY NZ LIMITED
Mercury’s generation assets produce electricity from 100% renewable sources: hydro, geothermal and wind. We’re also a retailer of electricity, gas, broadband and mobile services. We’re listed on the New Zealand Stock Exchange and the Australian Stock Exchange with the ticker symbol ‘MCY’, with foreign exempt listed status. The New Zealand Government holds a legislated minimum 51% shareholding of Mercury.
Visit us at: www.mercury.co.nz.
