By Sir Stephen Tindall
Since Covid-19 first hit, I have been focused on how I can contribute to helping our country get through its economic and social impacts. During lockdown, I sourced extra PPE for our medical personnel; helped set up a full supply chain to ensure food is not wasted but distributed directly to those in need; funded four local ventilator start-ups; and supported with extra capital some of the 130 New Zealand businesses my venture capital company, K1W1, has invested in.
I've also been reading and talking to many colleagues both here and overseas about how, as a country, business and government can invest for the best possible outcome for our country in an enduring Covid environment.
I've been looking at this through two overlapping lenses: investing in the infrastructure that will catapult us into 21st century ways of working and see us thrive at the same time; and decarbonising the economy to help us meet our commitments under the Paris Agreement.
One of the first decisions we can make to achieve both goals is collaboration between government and the private sector to accelerate the growth of New Zealand's data centre industry. This has the enormous potential to save the government real money in carbon credits, protect our data sovereignty and resilience, create employment, and help New Zealand decarbonise.
Microsoft's recent decision to build its first data centre in New Zealand illustrates this potential. Microsoft has committed to eliminating its global carbon footprint, and with 85 per cent renewable energy sources in New Zealand, our country offers a platform to help them achieve this while in return, creating job opportunities in the construction and ICT industries.
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New Zealand has the opportunity to develop a green data centre industry that serves not only New Zealand government and corporate clients, but could position our country as the leading provider of green data centres to the Asia-Pacific region, much like Scandinavia has done for Europe.
As a global industry, data centre companies and users are leading the way towards carbon neutrality by investing in building new, modern centres that run on green energy. With our country's high percentage of renewable energy sources, we are perfectly positioned to take advantage of this explosively growing industry. What we have learned during the Covid-19 pandemic is just how much more efficient we are by conducting big chunks of our business online, particularly multi-person meetings. The amount of time and fossil fuels we have saved can help decarbonise our economy substantially.
As I understand it, most of New Zealand's government data is stored and accessed through Australian and Asian-based data centres, many of which are powered by dirty energy sources such as coal. Not only would we be saving taxpayer money by converting to new and more efficient New Zealand-based green data centres, but like many countries are doing, we can also better protect our data sovereignty and resilience.
A move to committing to creating a green data centre industry would unlock hundreds of millions of dollars of new infrastructure and the jobs required to build them here. This is the perfect way to leverage ongoing government spending for our country's benefit. As new, renewable data centre generations are rolled out, we are probably the best country in the world right now to leverage our green credentials to build a chain of data centres throughout our regions, nationwide.
I understand there are potentially more green data centres on the drawing board if these can win contracts from New Zealand-owned businesses and secure enough data storage and access agreements.
Investing in our country requires 21st-century technologies and business models. Utilising data, machine learning and artificial intelligence will be critical. As an early adopter, we have the potential to build a sustainable competitive advantage over other countries. Supporting the shift to decarbonisation and sustainable technologies is equally necessary for both government and private sector investments, and we should disproportionately target these areas over the medium term, particularly renewables.
It is essential that the government be able to leverage private sector expenditure to multiply the scale of investment and get behind projects supported by private sector capital. Examples of this would be to orchestrate an industry-wide approach to the rollout of 5G in New Zealand and deploy new technologies and business models in ICT, health care and education.
The way we work globally is changing rapidly, utilising automation for key jobs and tasks. Instead of fighting this to protect outdated industries and business models, New Zealand's economy would be much more resilient if we prepared now for a world led by AI data and machine learning.
For both our nation's economic future and from a decarbonisation perspective, the more green renewable energy we commission the better. The world is looking for green energy sources, not only for data centres but also for many other applications. Here in New Zealand, retiring coal-fired heating in schools and industrial heat in dairy factories and other industrial applications will also make a big difference to reducing our carbon footprint.
There is also a way that we can export our green energy. I understand Asia is hungry for green hydrogen and ammonia for transport fuels, heating and conversion back into green electricity. For many Asian countries (and similarly in Australia), converting to electric vehicles won't decarbonise their economies. They may as well be plugging their cars into a lump of coal to recharge them.
Using our clean energy generation capacity, New Zealand has the opportunity to supply alternative energy solutions to these countries by converting our green energy into sought-after liquid hydrogen and ammonia for export. We could also use these fuels here at home for heavy transport such as ferries, trucks, buses, milk tankers and trains, reducing our own carbon footprint in the process. Replacing our Cook Strait diesel ferries with hydrogen-powered vessels would show the world how serious we are about this.
We know the post-Covid environment will be hard for the world over a sustained period however if we are smart about how we invest for our long-term future, we have the potential to harness these opportunities and prosper.