SYDNEY (Reuters) -Australia's remote Indian Ocean outpost of Christmas Island has enough power to support a new Google data centre without depriving locals, but its arrival could spur a push to renewable energy, the island's biggest employer and the tech giant said.

Alphabet's Google announced on Monday it will build a data hub on the tiny island located 350 km (220 miles) south of Indonesia, confirming a Reuters report.

It said it would also build a subsea cable system connecting Christmas Island to the Maldives and Oman, with two new data hubs to "deepen the resilience of internet infrastructure in the Indian Ocean Region".

Google's plans had raised concern there would not be enough power to meet the needs of locals, the island's phosphate mine and the data centre, but Phosphate Resources chief executive, Nicholas Gan, said supply was ample for now.

The phosphate company, which employs half the island's population of 1,600, imports diesel to run a power generator that supplies the mine and meets Australian defence force needs.

"The power grid can supply both Google's requirements and our requirements comfortably," Gan said.

Capacity would be strained, however, if the island's detention centre for asylum seekers or a shuttered resort were to reopen, he said, adding that Google's arrival bolsters the case for switching to renewable energy, which would be cheaper than importing diesel.

Australia's infrastructure department is in discussions with Google to ensure its energy requirements are met without impacting supply to Christmas Island's residents and businesses.

BOOM-BUST CYCLE ON REMOTE ISLAND

Another two planned Google subsea cables stretching east from Christmas Island will land near key Australian military bases, Reuters previously reported. Military experts say such a facility on the island would be valuable for using AI drones to monitor Chinese submarine activity.

Google said the island's data hub would be smaller than some other Google data centres, and it would share its digital infrastructure with local users.

"The power required for a connectivity hub can still be a lot for some smaller locations, and where it is, Google is exploring using its power demand to accelerate local investment in sustainable energy generation," its statement said.

A member of the island's economic future working group, Gan said Google's project will bring economic activity to an island 1,600 km from mainland Australia, with a history of boom and bust cycles, as it faced "the last era for mining".

About 23 years ago, Australia and Russia planned to build a commercial spaceport on Christmas Island, but it prompted concern from Indonesia and was never opened, Australian parliament records show.

A casino that opened in 1993 attracted high rollers arriving by private jet from Jakarta but closed five years later amid an Asian economic downturn, the records show.

A detention centre for asylum seekers trying to reach Australia by boat dominated the island for two decades, until a shift in Australia's immigration policy saw it largely emptied in 2023.