The provincial government is trying to sell Alberta as a prime location for data centres — buildings that store and process digital information.
Minister of Technology and Innovation Nate Glubish made his pitch on a trip to Silicon Valley last week. But the cost of power in Alberta may hinder these ambitious plans, one data centre CEO argues.
Glubish told CBC’s Edmonton AM the province’s environmental and business conditions are well-suited to the developments.
“We have a cold weather climate, so it’s easy to keep these things cool. We have an abundance of energy that we can develop very cheaply and very quickly in a very friendly business environment — and we can do this faster than anywhere else,” he said.
He emphasized the province’s focus on reducing red tape, and electricity policy that makes building power generation infrastructure easy.
The province asks companies to “bring your own power” and build their own infrastructure — and says projects will get approved in six months or less.
“And in all of the conversations I’ve had with these folks, they’re super excited about the value proposition that Alberta brings to the table,” Glubish said.
Glubish was in San Francisco for three days last week as part of a delegation that included representatives from the Alberta Electric System Operator and Invest Alberta.
The trade mission’s itinerary included meetings with tech companies Meta, Salesforce, Amazon Web Services, Microsoft, Bitdeer and Cleantech Group.
Dale Corse, CEO of the Wolfpaw, a data centre which hosts the internet exchange points for Edmonton, says cooler climate is an incentive.
“You see a lot colder weather here even than in Calgary. So the savings on air conditioners is a lot higher here just because of the amount of cold that we get and how long we get it,” Corse said.
But for any data centres that want to be a part of the electrical grid, Alberta isn’t a feasible choice, he said.
“Not even close … it’s very obvious that the power infrastructure in Alberta has not really been kept up to demand.”
During a deep freeze last January, Alberta issued four power-grid alerts in four days as demand for electricity outstripped generating capacity. In April, tens of thousands of households lost power as a shortage of electrical generation prompted the AESO to temporarily cut usage.
While it can be difficult to calculate and compare average electricity prices across provinces, 2023 numbers from information resource Energy Hub show average electricity cost in Alberta was the highest among Canadian provinces.
For Corse, that’s a major barrier for the province’s ambitions.
“I think we are well positioned for it, but the government really does have to get these energy costs under control.”
Glubish, however, said reliability and affordability of the grid is the priority.
“Almost all of these projects are looking at a behind the fence, off grid solution. So if they build their own power generation, it’s not connected to the grid, there’s no way that it can impact the grid.”
What about renewables?
The push for data centres is being driven by increased demand alongside the rapid developments in artificial intelligence — and they draw huge amounts of electricity.
Vittoria Bellissimo, CEO of the Canadian Renewable Energy Association, said that’s why renewables need to be a part of the conversation.
“I think it’s absolutely vital that new data centres come to the table with new supply and I think that new supply needs to be as clean as possible,” Bellissimo said.
Edmonton AM6:35Could Alberta become the data centre capital of Canada?
The Alberta government has a working group on data centre attraction. It wants to woo tech companies to bring massive, energy hungry facilities here. Chetan Dave is a professor of economics at the University of Alberta.
She noted that many data centres are actively seeking those renewable energy solutions out — and that they might even drive energy innovation in the province.
But following the temporary pause on renewable development and new rules around where wind projects can be located, Bellissimo said further clarity is needed for investors.
“We still have an electricity market design that’s in flux and we have transmission policy that’s in flux. So we need to land those that we can provide clear signals for new investment.”
Glubish said for the most part data centres will be powered by natural gas — at least for the next five years.
Because natural gas is reliable, Glubish said it’s the best choice for powering data centres — but that there’s a great deal of interest in carbon capture technology, wind, solar, and even nuclear solutions to make these projects net zero.
“We’re open to all of the above … But in the short term, we need to be able to use current day technology. The best technology for that, the cleanest technology for that is natural gas,” he said.
“We’ve got a great home run here to offer to this marketplace.”