Alberta premier Smith touts ‘opportunity’ in data centres
DATA CENTRES HAVE BECOME A RAPIDLY EMERGING OPPORTUNITY FOR ALBERTA AS THE PROVINCE SEEKS TO ATTRACT JOBS, INVESTMENT AND GAIN A FOOTHOLD IN THE HIGH-TECH SECTOR, ALTHOUGH IT ALSO FACES INTENSE COMPETITION TO MAKE IT HAPPEN. — CHRIS VARCOE
Speaking to a room full of potential investors during Stampede, Premier Danielle Smith said the government has had a busy dance card this week with one industry that’s calling on the province: data centres.
And her advice for developers of such energy-hungry facilities that use artificial intelligence and need access to electricity generation?
Come to Alberta — but be prepared to build, or bring your own power.
“In the past 48 hours, I’ve been talking about nothing but data centres and AI,” Smith told out-of-town investors gathered Wednesday at an event held by Invest Alberta, the province’s economic development corporation.
“We’ve been watching what has happened around the world and it seems like it’s really exploded in the last few months, everybody talking about the electricity constraints that are leading to difficulties in this sector. ... Bring your own electricity, bring your own generation. Partner with a generating company.”
Data centres have become a rapidly emerging opportunity for Alberta as the province seeks to attract jobs, investment and gain a foothold in the high-tech sector, although it also faces intense competition to make it happen.
According to the International Energy Agency, the coming boom in data centres, generative AI and cryptocurrencies could see its combined power consumption double by the end of 2026 from levels seen two years ago.
Large amounts of electricity for such complexes are required for computing and cooling systems.
Officials with the Alberta Electric System Operator confirmed in May it has at least six proposals for data centres in various stages of development in its application lineup that would use about 2,000 megawatts (MW) of power.
“We are a tiny part of the market right now. But the opportunity is just extraordinary,” Smith said in an interview. “Almost every meeting I’ve had for the last two days has been around data centres and AI, and some that are 20 megawatts, some that are 100 megawatts and some that are 2,000 megawatts of energy need.”
Many jurisdictions are competing to attract such projects, but Alberta has some powerful cards to play. These include land, access to renewable energy or natural gas to power these complexes, a skilled workforce and a climate that’s colder than other places — reducing a centre’s cooling needs.
“The potential growth of Ai-data centres presents significant opportunities,” John Kousinioris, chief executive of Calgary-based electricity generator Transalta Corp., said in a statement.
Significantly, Alberta’s deregulated power market and energy-only system allows developers to negotiate with private power firms — not a provincial Crown corporation — to build new generation.
In recent years, large tech companies such as Amazon and Microsoft have announced corporate power purchase agreements with renewable generators in the province, spurring billions of dollars in wind and solar developments.
Invest Alberta CEO Rick Christiaanse said data-centre developers — from large hyperscalers, such as the world’s largest tech firms, to mid-sized and small operations — are looking for the right location to build and have recently approached provincial officials.
“When we size this in terms of an opportunity ... from the numbers we’re seeing, it rivals what the province can do in (carbon capture) or even in hydrogen,” Christiaanse said in an interview Friday. “This is easily another $75-billion to $100-billion opportunity.”
He expects several proposals will be headed to Alberta municipalities for consideration in the coming months. Christiaanse stressed developments would unfold across the province, not just in the largest cities.
Technology Minister Nate Glubish, who is co-leading a cross-ministry committee to co-ordinate the province’s data-centre efforts, said one of the biggest bottlenecks for developers globally is access to electricity.
“This is an energy infrastructure play,” he said. “We want to prove to the world that we can build this infrastructure better than anywhere else.”
The multibillion-dollar question is how can the province, which recently has been faced with tight electricity supplies, meet the needs of Albertans while also attracting developers to build data centres here?
The premier said project proponents should look at the example of the oilsands and a “bring your own electricity” approach.
Some oilsands operators have built cogeneration facilities to meet their power needs and have the ability to sell excess power into the grid.
Smith mentioned that power generation facilities and data centres could be located on a single industrial site.
“If you want to look at the model, it’s up in our oilsands. They didn’t want to wait around for us to figure out how to build generation for them. They went and built it themselves,” she told the crowd. “That, I think, is the model for AI and data centres.”
There are other issues the province will need to tackle, such as finalizing its ongoing overhaul of the electricity system.
Greengate Power CEO Dan Balaban, whose Calgary-based company developed the country’s largest solar farm, agrees that there’s a tremendous opportunity to attract data centres to Alberta.
However, he stressed the province needs a stable energy framework to develop more renewable resources.
“Many of these tech companies that are the largest customers of data centres have made very strong renewable commitments,” he said. “It’s really encouraging the provincial government has recognized this opportunity and seems to be taking it seriously. And I hope they’re keeping in mind that Alberta has many different sources of energy — renewable and fossil fuel.”
It’s still early days, and data centre providers and power producers are trying to understand what the other side needs, such as connection to the grid and site requirements, said Pauline Mclean, a senior vice-president with Capital Power.
“In the different jurisdictions where we do business, everybody is grappling with the same questions,” she said. “The more clear a jurisdiction can be about what all the moving parts are ... that will be the key to unlocking the investment.”