Latest / Best of Business / Stew Hamilton: Mercury Energy CEO on the company taking a 12.7 percent stake in Datagrid NZ

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Stew Hamilton: Mercury Energy CEO on the company taking a 12.7 percent stake in Datagrid NZ · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks b Follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio. Now. Mercury,
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  Speaker 1: as I said, has bought a minority stake in the
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  Speaker 1: company that's planning to build a data center in Southland.
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  Speaker 1: The power company paid fifty three million New Zealand dollars
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  Speaker 1: for around about thirteen percent of Data Grid NANZ. The
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  Speaker 1: Southland data center has already attracted some controversy with locals
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  Speaker 1: concerned about how much power and water it's going to use.
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  Speaker 1: Stu Hamilton is Mercury's chief executive and with us now
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  Speaker 1: now host you.
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  Speaker 2: Good evening here.
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  Speaker 1: Now, why have you decided to put your money in this?
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  Speaker 2: So for us and we met Mercury's strategy and how
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  Speaker 2: we create values ultimately to build and operate power stations,
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  Speaker 2: and a key component of data centers is in the
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  Speaker 2: use of power. So we've got to have been building
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  Speaker 2: power stations at at a good rate and we've got
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  Speaker 2: a big pipeline ahead of us, and so one of
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  Speaker 2: the ways for us to maintain that rate of build
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  Speaker 2: is to have confidence of demand. And this partnership gives
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  Speaker 2: us the opportunity to be a part of that and
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  Speaker 2: engage to what we think is pretty excited and growth sector.
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  Speaker 1: Would this be a one off or do you think
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  Speaker 1: you might do more of it? It's definitely potential for
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  Speaker 1: more of it.
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  Speaker 2: Obviously, we don't have a data center of the size
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  Speaker 2: of this at the moment in New Zealand, so this
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  Speaker 2: will be the first one. It's the one which is
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  Speaker 2: most further progressed. But there's definitely potential if New Zealand
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  Speaker 2: can follow this trend. New Zealand has a lot of advantages.
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  Speaker 2: That means that data center companies across the world look
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  Speaker 2: at New Zealand as strong potential.
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  Speaker 1: Now talk me through the water problem.
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  Speaker 2: Yeah, so it's interesting. Absolutely, we're listening to the concerns
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  Speaker 2: and I know the data grade team are very mindful
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  Speaker 2: and focused on the concerns that are raised. The sort
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  Speaker 2: of data center that's been talked about for Markariwa down
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  Speaker 2: South is a data center which will be using technology
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  Speaker 2: which means that they actually use very little water. And
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  Speaker 2: it's quite a different approach to what a lot of
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  Speaker 2: the concerns coming out of the United States, for example,
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  Speaker 2: is so because Southland has I think it's average annual
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  Speaker 2: temperature is about nine and a half degrees celsius. It's
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  Speaker 2: got a lot of advantages when it comes to calling
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  Speaker 2: data centers already, and so the technology that's been proposed
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  Speaker 2: for the data center will be a recirculating calling system,
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  Speaker 2: which means that it uses very little water.
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  Speaker 1: So what about the power, because I mean, we're sitting
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  Speaker 1: in a situation right now where we're being told we
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  Speaker 1: don't have enough power potentially in dry, dry winters. Is
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  Speaker 1: this going to use it the power we need?
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  Speaker 2: Our goal is to build for this demand directly, so
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  Speaker 2: much like Monipodi POWERstation was built for TY initially down
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  Speaker 2: South and equally even the contract that we've signed up
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  Speaker 2: with TI in the last couple of years, we've been
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  Speaker 2: building a wind farm called Cora downs down in Gore
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  Speaker 2: for that load. We plan to build new power stations
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  Speaker 2: to supply this demand so it won't be pulling off
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  Speaker 2: the grid.
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  Speaker 1: Okay, what do the locals think of it now? Yeah?
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  Speaker 2: I think the very near locals around have been very
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  Speaker 2: closely involved in the project around the farm that has
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  Speaker 2: been purchased in the land that will be used for
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  Speaker 2: the data center. But there's definitely, as I sort of understand,
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  Speaker 2: a number of legitimate concerns that are being expressed from
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  Speaker 2: the community down south, And I think the key thing
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  Speaker 2: there is to provide more information on just what you
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  Speaker 2: were talking about there, right, the water use to power use,
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  Speaker 2: and also the potential for a significant number of jobs
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  Speaker 2: and ongoing sort of likely employment that we're looking at
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  Speaker 2: for the sort of data center is somewhere like two
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  Speaker 2: hundred to three hundred people, not to mention the large
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  Speaker 2: amount of construction jobs for the data center as well
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  Speaker 2: as the power plants that will be constructed for it.
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  Speaker 1: Hey, while I've got you, I see Mike Rohan from
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  Speaker 1: Meridian reckons power prices are going to come down next year?
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  Speaker 1: Are your power price is going to come down for us?
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  Speaker 2: So again, this comes from a space right where we
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  Speaker 2: fully understand that the burden that's been experienced by not
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  Speaker 2: just households but companies in general. So Mike, Mike talked
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  Speaker 2: about wholesale prices coming down, and that that's true when
• 4:01
  Speaker 2: you look at household power prices. Over half of the
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  Speaker 2: household power prices are actually associated with lines, charges, transmission
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  Speaker 2: and regulated costs. So over the next couple of years,
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  Speaker 2: those components of the bill will still likely to keep
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  Speaker 2: increasing a fairly significant amount. So I'd say that households
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  Speaker 2: have been insulated from high spikes over the last couple
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  Speaker 2: of years, but I think they'll start to smooth out
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  Speaker 2: in future.
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  Speaker 1: Yeah, okay, that doesn't sound like a yes or anything
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  Speaker 1: to me. Ste I appreciate your time, mate, You look
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  Speaker 1: after yourself. It's Steve Hamilton, Mercury Chief Executive. If you are, though,
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  Speaker 1: looking forward to those power prices, you probably have to
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  Speaker 1: just calm your farm a wee bit because according to Meridian,
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  Speaker 1: you are going to have to wait until twenty twenty seven.
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  Speaker 1: Because of course, when do we set our prices the
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  Speaker 1: electricity is it April April of the year, So you're
• 4:46
  Speaker 1: probably you're waiting until April next year before you see
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  Speaker 1: that come through. You wait until April the next year.
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  Speaker 1: They hold the prices down when they're paying heaps, and
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  Speaker 1: they hold the prices up when they're paying less, and
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  Speaker 1: you just have to wait. Twelve past six For more
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