Province to focus on three pillars: power capacity, securing economic growth for the province, and promoting “sustainable cooling” strategies
The Alberta government has released its first road map to attracting massive AI-focused data centres to the province, and Technology Minister Nate Glubish has aggressive targets to reach.
Landing such developments in Alberta could lead to more than $100 billion of investment, while creating thousands of technology jobs and spurring new demand for natural gas that will be needed to generate electricity to power such facilities, Glubish said in an interview.
But turning these ambitions into final investment decisions (FIDs) won’t be a slam dunk, with plenty of other places in the hunt to host AI data operations.
“Alberta should be a destination of choice for this investment . . . A realistic target for us would be, over the next five years, to have secured $100 billion or more of investment across a half dozen projects,” he said.
“We’ve got a short list here of about 10 or 12 (developers) that are pretty serious . . . It’s realistic that sometime here in 2025 we’re going to start seeing some specific details around some of these projects.”
Data centres use a lot of electricity for computing and cooling systems, and generate a lot of heat. Alberta’s cold climate is one of its natural advantages, as it helps lower such costs.
The average ChatGPT query uses about 10 times the power of a standard Google search, according to Goldman Sachs.
For power, Glubish noted Alberta has plenty of natural gas reserves that can be used to generate electricity to support new facilities in the future.
Initially, it will be easier and faster for developers to “bring their own power” and secure off-grid generation, rather than tap into the provincial power grid.
(A new phase of the strategy next year will come up with rules and plans on what grid-connected infrastructure will look like for data centres.)
But the province will ensure that there’s no risk to the reliability or affordability of power markets from hosting such developments, he said. “That’s a no-go zone for us.”
The province has a concierge program in place with the government working with potential project proponents looking to come to Alberta, helping them navigate the process.
In May, the province established a cabinet committee to develop a plan and capitalize on the rush of data centre developments.
More than 11,000 such facilities are registered around the world — roughly one-third based in the United States — and investment in such centres has soared over the last two years, driven by the rapid development of artificial intelligence, according to the International Energy Agency (IEA).
New, large-scale data centres by hyperscalers — such as Microsoft, Google, Amazon — are in the works around the world, often requiring hundreds of megawatts (MW) or more of reliable electricity supply.
As the IEA notes, the data centre sector already makes up 10 per cent of power demand in at least five U.S. states, and more than 20 per cent in Ireland.
A report last month by consultancy McKinsey & Co. projected global demand for centre capacity could more than triple by the end of the decade.
Alberta has several cards to play to attract more facilities, including an expected surplus of electricity in the next few years as new gas-fired power generation and renewable power projects are completed.
Since May, a handful of potential data centre developments have applied to the Alberta Electric System Operator (AESO) to connect to the province’s transmission system.
In its latest report this month, AESO said it has 12 projects in the lineup, representing more than 6,500 MW of demand, including four in the Calgary area with 1,155 MW of potential load.
In an interview last month, eStruxture CEO Todd Coleman said he sees Calgary as “one of the key linchpins to Canada’s foray in driving AI demand north of the border” and the company expects to make further data centre investments in the province over the next 10 years.
The company considers several factors when determining where to build such facilities, including the availability of electricity, land, fibre-optic links, a skilled workforce, and the speed of regulatory and permit approval.
“The province gets an A for a desire and an acknowledgement that administrative hurdles need to be reduced, but there’s still a lot of work to be done in order to pull that off,” he said.
“Frankly, we see those challenges (and) it’s not limited to Alberta. It’s just, can Alberta become faster, better, more efficient, more thoughtful, beyond its competition and other parts of the world where these investment dollars could go?”
Glubish noted a 1,000 MW data centre, along with the supporting power generation would create in the range of 200 to 250 full-time jobs.
Alberta will conduct a review of all regulatory timelines associated with AI, collaborate with municipalities to attract such developments and prioritize economic reconciliation with Indigenous communities, as part of its strategy.
Chris Varcoe is a Calgary Herald columnist.