The case for data centres
Data centres are one of New Zealand’s next major export opportunities. Our new report asks whether the country should welcome them or hold them back. Our conclusion is clear: New Zealand should welcome them - without subsidy or special treatment.
New Zealand has a world-class renewable energy endowment. Data centres offer a way to turn that endowment into high-value digital services that can be exported instantly, without the distance penalty that has historically constrained New Zealand’s participation in global value chains.
Why the case is stronger than it first appears:
• Data centres turn renewable electricity into exportable machine intelligence - a modern extension of New Zealand’s long history of exporting energy embodied in products.
• Few direct jobs relative to output are a sign of high labour productivity, not a defect. Workers not absorbed by a data centre remain available for other production.
• Large, contracted demand can make new geothermal, wind and solar generation easier to finance, increasing and diversifying electricity supply.
• Higher prices are a signal for new supply. Restricting demand may hold prices down temporarily, but it also removes the incentive to build more generation.
• Water, land, noise and construction effects are local questions that should continue to be assessed site by site through the consenting system.
Policy should rest on three principles:
Data centres should be allowed to compete for electricity on the same terms as other users.
Connection applicants should pay the attributable costs of transmission, distribution and other network investment.
Local environmental effects should remain subject to site-specific assessment.
A project that can pay the market price for electricity, its connection costs and the environmental costs required through consenting has shown that its production is worth more than the resources it consumes.
Read the full report for the analysis, evidence and policy recommendations.
Heuser | Whittington, August 2026.