New Zealand's National Party would make AI data centres bring their own firmed power

Mercury Energy and Datagrid signed their contract in March 2026: a 15-year Power Purchase Option Agreement for 140 MW ^[10]. National's spokesperson Simeon Brown and Prime Minister Christopher Luxon have since said that power purchase agreements with generators such as Mercury would fit inside the new framework ^[6]. Datagrid's campus near Invercargill is planned at 280 MW ^[8], so the contract covers half of it and leaves 140 MW still to find ^[1]. The report does not include the price Datagrid pays, or what exercising the option commits each side to.

The policy turns on two words. Additionality means the developer finances or arranges new generation alongside the project, typically renewable ^[4]. Firmed means supply that can be relied on when the wind is not blowing and the sun is not out ^[5]. A developer that buys an incumbent's output under contract pays a contract price. A developer that has to fund a new wind farm plus whatever makes it reliable pays something closer to the cost of a power station, and has to have it lined up before the project can proceed ^[15]. Crypto Briefing, which reported the policy, says the definition of firmed, the way contracts are verified and the treatment of existing agreements will shape the outcome ^[17].

The rule could be written three ways. In the loosest, any long-dated contract with a generator counts, the rule formalises the Mercury-Datagrid deal (Crypto Briefing calls that deal a preview of the framework ^[11]) and developers pay roughly what they were paying anyway. In the strictest, every contracted megawatt has to be matched by new firmed capacity, and the developer is in effect financing generation. In the third, Labour's and the Greens' versions, similar to National's but different in detail ^[13], end up setting the terms, and how far they differ decides how much certainty developers get ^[18].

I think the loose version is closest to what National has described, because its leaders named Mercury-style contracts as acceptable ^[6]. The counter-case is plain. A contract that only reallocates output from existing plant adds no supply, and existing users would still be bidding against data centres for the same power, the outcome the policy says it is meant to prevent ^[3]. Under either reading the cost moves off household bills on paper. Under the loose one it sits in the price generators charge developers; under the strict one, in developers' capital budgets. The view is wrong if Datagrid's second 140 MW can only be contracted against newly built firmed plant, or if the campus stalls at half size.

The load is growing fast. Data centres use about 0.6% of New Zealand's electricity and are projected to reach around 3% by 2030 ^[7], a fivefold rise ^[2]. Hyperscale campuses of Datagrid's size could use more than the Tiwai Point aluminium smelter ^[9]. National is not asking the existing grid or its customers to supply that growth ^[1]. For companies building wind, hydro and geothermal, each campus that has to match its own load is a long-dated, creditworthy buyer ^[16]. National says New Zealand has built more renewable generation in the last three years than in the previous eight ^[12]. According to Crypto Briefing, the policy is positioned to help attract between $25 billion and $35 billion of AI infrastructure investment ^[14].