A portion of the quiet construction site at Amazon-owned land in Westgate, on August 31. Photo / Chris Keall
A power company provides two key points of clarity after Amazon’s PR disaster last week.
It’s been hard to tell what’s real, or not, with Amazon’s “$7.5 billion” Auckland data centre “region” launch last week.
The tech giant has been its own worst enemy, refusing to comment on the it bought at Westgate in the city’s northwest, or whether it has bought space with existing data centre operators as per pervasive industry chatter.
The firm has offered zero physical details of the new local setup for its Amazon Web Services division.
But there is one element we can take to the bank. Amazon is actively using the massive power contract it signed with Mercury in 2023 to take half the output from the gentailer’s new 103MW windfarm south of Palmerston North for 15 years - and at the pricing agreed in 2023 - debunking a report that rising power prices were to blame for Amazon abandoning its Westgate build, which would have been one of the largest construction projects in the country if it hadn’t stalled at the earthworks stage.
“Yes, our power purchase agreement is in place, with Amazon purchasing around half the output of Turitea South, the southern section of Turitea Wind Farm,” Mercury wholesale executive general manager Tim Thompson told Tech Insider.
“Turitea South is 102MW and produces on average 370GWh per annum.
“The PPA [Power Price Agreement] is for half of that, equivalent to 185GWh. They are buying the capacity today,” Thompson said.
“The financial terms of the deal are confidential, but I can confirm there has been no change since the agreement was signed,” he added.
“Agreements like this underwrite our development pipeline, helping us bring projects to life faster. That ultimately means we can deliver more reliable and renewable energy for New Zealand,” Thompson said.
The mystery remains why Amazon abandoned its own data centre build at Westgate - where it bought the last tranche of its land only in January. Was it overall costs? The tech giant won’t comment.
But the fact that it’s chugging through tens of megawatts from Mercury shows that whatever AWS’ alternative plan was - and is - a substantial operation.
Industry insiders have dropped heavy hints that AWS has spent serious money moving its own servers and other infrastructure into third-party data centres.
Brookfield-owned DCI’s Albany facility, for example, has space for 80,000 servers (more on that below). That’s supermassive. If AWS took a fair chunk of that - which is unconfirmed but likely - plus space in two other facilities, then it’s easy to see how it is indeed chewing through around 50MW per year (or enough capacity to power around 50,000 homes).
That’s a real, good news story for local cloud computing and AI, if only Amazon had filled in the blanks.
But it didn’t and, accordingly, it faced a backlash over its opaque communication, which it says is in line with its global policies around data centre security.
Tech commentator Peter Griffin called it a “train wreck” and he was one of the kinder voices. His podcast (below), includes audio from a brutal interview between Newstalk ZB’s Heather du Plessis-Allan and AWS’ sticking to-the-script NZ country manager, Manuel Bohnet.
But one AWS customer, Glen Barnes - chief product officer at STQRY - called to say he didn’t care how Amazon delivered its cluster of three “availability zones” (three separately-powered and connected data centres, for redundancy) - whether they built their own or “co-located” by taking space in one constructed by the likes of CDC or DCI.
“No matter what data centre they go into they need to provision it and buy electricity. It doesn’t matter if they own the data centre or it’s a third-party; there still needs to be the infrastructure to house it and the staff to service it. They still need to buy power, connectivity, employ people, etc.
“And the one out west would only have been one of three they required for the region.
“So at launch, they are not in their own data centres. I’m sure once the region expands more they will need more real estate and maybe that is when the new site will go online or another site.
“So what’s the problem? For us, having AWS in NZ is a good thing as it makes it easier to land NZ-based business.”
Barnes said he was not a mindless Amazon fanboy. His firm had moved some of its business off AWS “to better, cheaper CDNs [content delivery networks]”.
But he saw no issue with a business leasing space rather than owning it.
And it might well make sense. But the mystery remains why the Westgate site was seemingly a go up until January, and the “1000 jobs” and “$7.5b investment” claims, which first seemed like a coup for Prime Minister Christopher Luxon to announce quickly turned fraught as it was pointed out that AWS and then Prime Minister Jacinda Ardern first touted the figures back in 2021 - and today we’re no closer to any hard details that would back them up.
Local data centres are a good thing. They are faster at serving up cloud-based work and entertainment services, and solve “data sovereignty” issues for banks, government departments and others wary of storing files offshore (Amazon has previously serviced New Zealand AWS clients from data centres on Australia’s East Coast).
But some West Aucklanders could be wondering, what has been built, and where?
At Westgate Northwest Auckland, Costco and other retailers have recently been joined by giant “hyperscale” data centres built by DCI (owned by Canada’s Brookfield) and, on a $1b budget, a second built by Microsoft. A $300m-plus CDC data centre is just down the road in Hobsonville.
A fourth supermassive data centre looked like it was under way, on a site where Amazon has bought land.
Amazon first announced its plans for an Auckland data centre Region in 2021, saying it would spend $7.5b billion on the project over 10 years (for land, construction, staff, services and hardware) and create 1000 jobs, including those for the construction phase (data centres are highly automated once up and running). It also released a study saying that, separately, the project would provide a $10.8b boost to NZ’s GDP.
The story continued in early 2022, when Prime Minister Dame Jacinda Ardern made a trip to Seattle and met Microsoft and Amazon. The PM had been talking to the tech giants for two years about investing in data centres in New Zealand.
A March 2022 Overseas Investment Office decision gave Amazon the green light to acquire land at an undisclosed location for the “establishment of a business, being a cluster of data centres in Auckland ... Consideration [price]: between $250,000,000 and $350,000,000″.
Property records show Amazon Data Services Ltd (ultimately owned by Amazon) subsequently bought a 26,411sq m block of land at 73 Fred Taylor Drive, Westgate, in June 2022 and a 13,345sq m block at 75 Fred Taylor Drive in August 2022.
In January this year, Amazon also bought the adjoining 2018sq m 77 Fred Taylor Drive.
All told, the land is the size of four rugby fields.
Amazon originally said its AWS (Amazon Web Services) data “Region” would open in Auckland at the end of 2024.
The tech giant has always refused to comment on the location, citing a global security policy. Nor has it ever provided any tech specs.
In March 2024, RNZ reported that final consent for the Westgate build had been held up by drainage issues.
It seemed the issues were resolved later that year as preliminary earthworks began. But works seemed to have stalled when the Herald visited in January, June and the last weekend in August when the Herald visited.
As of late August the site was abandoned, with no longer even a security guard. A handful of diggers present in June have gone. Newsroom reported that Amazon had abandoned the build because of rising power prices.
In June, the Herald asked Auckland Council if the drainage issue remained an obstacle.
A council spokeswoman said: “There are no issues from a regulatory perspective, including with the resource consent, which have led to a pause in construction. You will need to check in with the site owner to confirm why works have stopped.”
Amazon declined to comment. Contractor Naylor Love did not respond to a request for comment. On-site, a Naylor Love staffer told Tech Insider: “We’re under NDA [a non-disclosure agreement]. We can’t comment.”
Tech Insider has previously speculated that AWS could be co-locating in CDC or DCI-owned facilities. Co-location is common in many markets. It’s fundamental to DCI’s business. It is not labour-intensive, given data centres are largely automated. It is not clear where the 1000 jobs will come from.
Unlike Amazon and Microsoft, DCI has been happy to reveal the location of its smaller, now-operational Westgate site (its address and photos feature on its website) and its still under-construction Albany site, which it said would cost $400m (including $68m for the land; DCI said it would spend a total of around $600m including Westgate, providing more than 50 megawatts of capacity).
Amazon’s Westgate site is similar in size to the Microsoft facility now open a block over – where costs were put at $1.06b (read a breakdown here).
But it’s still smaller than the combined footprint of CDC’s twin data centres in Silverdale and nearby Hobsonville – where half-owner Infratil put the initial build cost at $300 million before recent expansions that have included a doubling of the Hobsonville site – or DCI’s second facility, in Albany, which is easily the largest announced so far; its 5.8ha site that can house up to 80,000 servers.
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.