The Green Party wants the government to put a one-year stop on approving new AI data centres, saying the rules are not ready for how big these projects have become.

The trigger is a planned $3.5 billion data centre in Makarewa, Southland, run by a Singapore-based company called Datagrid. It would cover 78,000 square metres and use 280 megawatts of power. That would make it the second-biggest electricity user in the country, behind only the Tiwai Point aluminium smelter. Green Party co-leader Chlöe Swarbrick said it would use about six percent of all of New Zealand's electricity. RNZ

Data centres are large buildings packed with computer servers that store and process information, including the systems behind artificial intelligence. They need huge amounts of electricity to run and to keep the computers cool.

The Datagrid consents also include the right to draw more than 600,000 litres of groundwater per day. Datagrid has stated it will not use any groundwater, preferring Invercargill's naturally cool air and rainwater when needed.

Mercury Energy has taken a 12.7 percent minority equity stake in Datagrid NZ for $53 million, following a 140 megawatt power purchase agreement signed in March. Southland mayor Rob Scott has described the data centre as a good opportunity for the region.

Swarbrick said the proposed pause was targeted and time-limited. She said it was "not a ban on data infrastructure but a pause on the most resource-intensive developments until intentional regulation was developed." She also noted that councils can currently approve these projects without asking the public, meaning no one in the community gets a say.

The Greens are looking at what other countries have done. The Australian government recently announced it would set up an Office of AI to manage AI standards, require data centres to produce their own energy, and limit water usage. Swarbrick also pointed to New York, which paused new large-scale data centres until it had proper rules in place.

The broader context here is that New Zealand's rules for managing land, water, and resource use were written before AI data centres existed. The Datagrid facility would use as much power as the Tiwai Point smelter, and Tiwai's future has been uncertain for years. Adding that much demand to the national grid raises questions about whether there is enough power generation, who pays for new transmission lines, and how fast New Zealand can switch other parts of the economy to clean electricity. The fact that a project this large can be approved without public input means those questions are not being openly debated.

The Greens' proposal raises the question of whether the current rules are the right tool for handling the combined impact of multiple large data centres, or whether a separate set of rules, like what Australia is moving toward, is needed. The one-year pause would give policymakers time to write rules on energy use, water use, and how scarce electricity capacity should be shared out.

The call also sits alongside the government's own plans to rewrite resource management laws. Whether a pause gets support will depend on whether the government thinks the current rules are working for this kind of development, or whether it agrees with the Greens that AI infrastructure is moving faster than the rules can keep up.