Countries with ample electricity supplies will be on the radar for these mammoth centres, including those built by global hyperscalers such as Google, Microsoft and Amazon
The data centre train is preparing to leave the station, with AI as the conductor.
Will Alberta be a prime destination, or simply a whistle-stop for passengers on a larger journey?
Much will depend on our electricity supply — including what ultimately generates additional power — and how quickly the province can seize the opportunity.
A new report issued Wednesday by the Canada Energy Regulator estimated 239 data centres are operating across the country, with 22 based in Alberta, including 12 in Calgary and nine around Edmonton.
The CER’s industry snapshot noted Canada’s cold climate — reducing cooling needs in these facilities — the relatively low cost for electricity in some provinces, and significant renewable and clean power supply, make the country “an attractive destination for data centres.”
It pointed out such facilities have been driven by low power costs in British Columbia and Quebec, where non-emitting hydroelectricity is abundant.
The report said that by the end of the decade, AI is expected to lead to a 160 per cent jump in global data centre power use; the average ChatGPT query requires about 10 times the amount of electricity as a standard Google search.
At the Energy Disruptors: Unite summit on Wednesday, industry experts examined the seismic shifts in the energy transition caused by artificial intelligence, and how AI data centres are expected to gobble up huge amounts of electricity.
Countries with ample electricity supplies will be on the radar for these mammoth centres, including those built by global hyperscalers such as Google, Microsoft and Amazon.
“Energy is really core, key to the continued growth of the data centre industry,” Jim Collins, who is in charge of Microsoft’s data centre energy strategy, told the conference.
“A lot of times, that business case is largely driven by power — power timelines, power quantities and then cost-based energy rates.”
Alberta wants to be part of the mix when companies are searching for new places to build. The head of Invest Alberta recently said data centres represent “another $75-billion to $100-billion opportunity” for the province.
The International Energy Agency (IEA) has projected that the growth in data centres, generative AI and cryptocurrencies could lead to global power consumption for these facilities doubling by the end of 2026 from levels seen two years ago.
Collins said power reliability is a key issue for Microsoft, noting its data centres include backup electricity — using generators and battery storage technology — in case of outages.
Microsoft also has significant climate goals. The tech giant has declared it will be “carbon negative” by 2030.
“The hyperscalers . . . all have very ambitious sustainability goals, and the electricity consumed by the data centres has a very strong impact on their carbon footprint,” Ana Domingues, global energy and AI lead for EY, said in an interview Tuesday.
“This isn’t just about getting energy, it’s about getting green energy.”
While Alberta lacks the huge population base of Ontario or surplus hydroelectricity, it has plenty of affordable natural gas to provide round-the-clock electricity generation. Alberta has also seen a boom in renewable energy projects in recent years, although there are signs it’s slowing.
Aside from attracting outside investment and creating new jobs, data centres would also help share some of the transmission and distribution costs of the grid.
Alberta Technology Minister Nate Glubish said the province is meeting with executives of major hyperscalers and having “serious discussions” on several project proposals totalling thousands of megawatts of potential infrastructure.
“Unfortunately, it’s not feasible to run an AI data centre on intermittent renewables like wind and solar today. These sites require reliable baseload power, such as natural gas. The next three to five years of data centre infrastructure will rely heavily on natural gas-powered electricity,” he said Wednesday in a statement.
“There is a lot of interest in developing additional natural gas power with the option to add carbon capture capabilities.”
Yet, there are clear signs that large tech companies are looking for non-emitting sources of power, such as renewable energy and nuclear.
In September, Microsoft agreed to a 20-year agreement with Constellation Energy to secure electricity for its data centres.
Constellation will provide power from one of the restarted reactors at the Three Mile Island nuclear facility in Pennsylvania. (Three Mile Island became the public face of concerns about nuclear power in the United States in the late 1970s after a high-profile accident.)
Industry experts say all sources of power will be needed as the pace of data centre development will be critical in the race to develop and deploy AI.
“You need a lot of power. You need it to always be available and you need it to be as clean as possible,” said Ed Crooks, vice-chair of energy in the Americas for consultancy Wood Mackenzie.
“And it’s the availability of those things that’s increasingly going to determine where data centres locate.”
Natural gas provides reliability and will allow companies to build data centres quickly — the technology is well understood — but it also creates emissions.
Tech companies will likely look for projects that can add carbon capture and storage, or convert to using hydrogen in the future, to meet their climate goals, Crooks said.
“It’s load growth that we haven’t seen before in the power system and we have to figure out a way to manage it,” added Vittoria Bellissimo, CEO of the Canadian Renewable Energy Association.
“All of these technologies will need to work together to serve the enormous load that we’re expecting to see.”
Chris Varcoe is a Calgary Herald columnist.