New rules in Australia on electricity rules and water usage are turning heads at New Zealand's major political parties, as questions are raised around resource use by large scale data centres.
Over the weekend, the Green Party called for one year pause on AI data centre consents, with co-leader Chlöe Swarbrick saying; "if an AI data centre project does not meet basic standards for power, water use and environmental impact, why should we allow it to be built here?"
On Monday Prime Minister Christopher Luxon said the key thing for NZ is "getting some sensible, common sense rules in place." Luxon noted data centres "have started to lose some social licence" in Europe and North America.
Luxon has officials from the Department of Prime Minister and Cabinet, and the Ministry of Business, Innovation and Employment looking at that, and wants outside input from the energy sector and also from data centres.
"I think we can find quite good bipartisan support for that going forward. But the answer is not to turn off investment before it's even showed up in the country."
He did not think New Zealand's data centres would be "massive" consumers of water due to the climate.
Recently, a $3 billion data centre was approved near Invercargill, with concern raised about its potential water and electricity use. There are already more than 50 data centres in NZ, which can store and transmit data and hold servers, storage drives and artificial intelligence (AI) processing, and an additional 20 planned to be built, according to TVNZ's 1News.
The Greens want "proper rules" in place in order to avoid "straining our resources," Swarbrick said.
"Experience overseas has seen these projects turn local water supply to sludge and suck huge amounts of energy, driving up prices for regular people. Some may argue these AI data centres could build their own renewable energy, or that they’re increasingly using closed-loop water cooling systems,” she said.
“That may well be the case, but our current rules don’t require any of those things."
Earlier this month, Australia rolled out an AI roadmap, with a legal obligation for new large-scale data centres to underwrite new power supply and pay their share of grid connection, so no costs are passed on to homes or businesses.
"Australia is the sunniest continent on earth, but we're also the driest. Which is why our rules will require data centres to minimise their water use, maximise their energy efficiency, and pay for any additional water infrastructure required," Australian PM Anthony Albanese said.
On power use, Luxon said the NZ rules they will set up for data centres would contain; "essentially, a compact that we would actually say this is the deal by which you come into New Zealand if you want to build out a data centre."
He said having alignment with Australia was important, "so we don't lose the social licence to operate."
"Importantly, this is a massive opportunity for New Zealand."
Climate Change Minister Simon Watts, recently returned from Australia, said energy usage and water usage were two key factors and was optimistic on alignment with Australia on the issue.
"It's definitely an area where both countries are going to look to align more closely in regards to our standards. It's definitely something that we're taking a look at, in terms of what they're looking at... We'll look to align regulatory standards where possible, so it's something that we'll be open to."
Labour leader Chris Hipkins agreed with "a heck of a lot" of the Australian AI framework, which also includes a new Office of AI and legal protections for local content.
"There's real room for trans-Tasman alignment there.
"In terms of the energy that data centres in New Zealand use, the real question we've got to ask is: Is this new energy generation, or is this competing with existing users of New Zealand electricity?"
"If it's bringing new energy generation on stream, that's a good thing. If it's competing with us for our existing electricity, potentially pushing up the price for other businesses and for New Zealand consumers, that's not great," Hipkins said.
He said Labour would have a policy on AI which would have "a lot of similarities with Australia."
A United Nations University Institute for Water, Environment and Health report released in June warned AI could consume 3% of the world's electricity by 2023, with carbon emissions equivalent to the United Kingdom's 2025 output, with the water needed to cool data centres at the level of the world's drinking water needs for 1.6 years, according to the Science Media Centre.
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