“Pre-purchase agreements are a standard process whereby a customer commits to securing this equipment in order to help minimise potential schedule pressures down the line and meet their timelines.”
A Transpower spokesman said: “The value of the agreement is commercially sensitive. However, the amount has been fully paid upfront by the customer [Datagrid] and does not require additional capital raising.”
Funding is a key element. Mercury Energy recently bought a 12.5% stake in Datagrid for $53 million.
The funds will be used for initial earthworks, which Datagrid founder and executive chairman Remi Galasso says will begin next month – while he seeks to raise additional funds in a Series B round for a build that is budgeted at up to $5 billion.
Galasso says the initial 280MW design could be expanded to 1GW – with the qualifier that plans have yet to be finalised, and will depend on the amount of capital ultimately raised.
Last month, Datagrid said it had signed contractors for the “Tasman Ring Network” cable that will export its AI compute power to Australia and beyond, but in a downsized design, with only the marine survey element funded.
For the substation, Datagrid has bought four high-voltage power transformers, associated bushings, and other long-lead items, Transpower says.
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The transformers will be manufactured by Egyptian firm Elsewedy Electric.
Trade sources indicate the transformers could cost north of US$10 million each.
“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,” Transpower chief executive James Kilty said.
“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.”
Yesterday, Datagrid was one of the companies targeted by protesters outside the Data Centre Leaders Summit at the Cordis hotel in Auckland.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
