Varcoe: 'The bait is on the hook' – Alberta unveils map to attract AI data centres, eyes $100B in new investment – Calgary Herald
Province to focus on three pillars: power capacity, securing economic growth for the province, and promoting “sustainable cooling” strategies
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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.
However, turning these ambitions into final investment decisions (FIDs) won’t be simple, with plenty of other places also in the hunt to host AI data operations.
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“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.
“It’s realistic that sometime here in 2025 we’re going to start seeing some specific details around some of these projects.”
It might seem like an unachievable objective, but Meta confirmed Wednesday it will make a single $14-billion investment in north Louisiana to build its largest AI-optimized data centre, a sign of just how large the stakes are in this race.
In Edmonton, Glubish released the province’s new data strategy on Wednesday, designed to pull in big-ticket investments to the province.
It focused on three pillars: power capacity that’s needed to operate such facilities around the clock, securing economic growth for the province, and promoting “sustainable cooling” strategies.
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Data centres use a lot of electricity for computing and cooling systems, generating a lot of heat. Alberta’s cold climate is one of its natural advantages.
The average ChatGPT query uses about 10 times the power of a standard Google search, according to Goldman Sachs.
Alberta has ample gas reserves that can generate electricity for new facilities.
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 develop 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, Glubish said.
In May, the province established a cabinet committee to develop a plan and capitalize on the rush of data centre developments.
“As we look at the growth of AI and the incredible opportunity that exists around it, we want to be part of it,” Premier Danielle Smith told reporters.
“I would say that anywhere that has a nearby natural gas resource is probably going to be the biggest beneficiary of the AI data centre strategy, as well as those that have the ability to develop their own power.”
More than 11,000 data centres are registered around the world — roughly one-third based in the United States — and investment in such facilities has soared in the last two years, driven by the rapid development of artificial intelligence, according to the International Energy Agency (IEA).
Mammoth new data centres for hyperscalers — such as Meta, Microsoft, Google and 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 already has 22 such facilities in operation, including 12 in Calgary. Industry giant Amazon Web Services (AWS) unveiled plans three years ago to establish a cloud computing hub in the region.
Last month, Montreal-based eStruxture Data Centers announced a new $750-million AI-focused facility will be built north of Calgary in Rocky View County, which will draw 90 MW of power from the grid.
Alberta has several advantages it can use to attract more facilities, including an expected surplus of electricity over the next few years as new gas-fired power generation and renewable power projects are completed.
As the only province with a deregulated electricity sector, project developers can negotiate directly with private power generators such as TransAlta or Capital Power to build new supply.
Since May, several 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 listed 12 such 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.
Five large AI hubs have been submitted to AESO’s connection list by Beacon AI Data Centres, a private development firm. Its plans include proposed 400 MW centres in High River, Langdon, and the Edmonton area.
Former Alberta energy minister Ken Hughes, a vice-chair of Beacon, noted major hyperscalers need to quickly make their investments in North America for AI data centres, potentially within the next 12 months.
“Alberta is in a race with other jurisdictions, particularly around North America. The sooner that we’re able — as a province, as a community — to land the first AI facility, the better, because others will see that as a validating move,” Hughes said.
“It’s not a slam dunk. It’s a race — but it’s a race in which we have a lot of competitive advantages.”
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 five to 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.
A 1,000 MW data centre, along with the supporting power generation infrastructure, would create in the range of 200 to 250 full-time jobs, Glubish said.
For Alberta to reach its $100-billion target, it would need all 6,500 MW of data centre proposals in the AESO connection lineup to come to fruition, noted analyst Carson Kearl of energy analytics firm Enverus.
It’s not likely the province will become North America’s destination of choice for AI data centres, given states such as Virginia and Texas are already well-established, but it could reach that level within Canada and the northwest U.S., he said.
He noted Alberta’s grid is relatively small, and adding six gigawatts of demand would increase its load by about 50 per cent. It’s also unclear how long hyperscalers will be willing to use gas to generate electricity before they will want to shift to non-emitting sources of power.
“We are making the right moves. The bait is on the hook. How many fish are we going to catch?” Kearl said.
“There’s a lot of hooks in the water.”
Chris Varcoe is a Calgary Herald columnist.
cvarcoe@postmedia.com
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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.
However, turning these ambitions into final investment decisions (FIDs) won’t be simple, with plenty of other places also in the hunt to host AI data operations.
Your weekday lunchtime roundup of curated links, news highlights, analysis and features.
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
A welcome email is on its way. If you don’t see it, please check your junk folder.
The next issue of Noon News Roundup will soon be in your inbox.
We encountered an issue signing you up. Please try again
Interested in more newsletters? Browse here.
“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.
“It’s realistic that sometime here in 2025 we’re going to start seeing some specific details around some of these projects.”
It might seem like an unachievable objective, but Meta confirmed Wednesday it will make a single $14-billion investment in north Louisiana to build its largest AI-optimized data centre, a sign of just how large the stakes are in this race.
In Edmonton, Glubish released the province’s new data strategy on Wednesday, designed to pull in big-ticket investments to the province.
It focused on three pillars: power capacity that’s needed to operate such facilities around the clock, securing economic growth for the province, and promoting “sustainable cooling” strategies.
Subscribe now to read the latest news in your city and across Canada.
Subscribe now to read the latest news in your city and across Canada.
Create an account or sign in to continue with your reading experience.
Create an account or sign in to continue with your reading experience.
Data centres use a lot of electricity for computing and cooling systems, generating a lot of heat. Alberta’s cold climate is one of its natural advantages.
The average ChatGPT query uses about 10 times the power of a standard Google search, according to Goldman Sachs.
Alberta has ample gas reserves that can generate electricity for new facilities.
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 develop 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, Glubish said.
In May, the province established a cabinet committee to develop a plan and capitalize on the rush of data centre developments.
“As we look at the growth of AI and the incredible opportunity that exists around it, we want to be part of it,” Premier Danielle Smith told reporters.
“I would say that anywhere that has a nearby natural gas resource is probably going to be the biggest beneficiary of the AI data centre strategy, as well as those that have the ability to develop their own power.”
More than 11,000 data centres are registered around the world — roughly one-third based in the United States — and investment in such facilities has soared in the last two years, driven by the rapid development of artificial intelligence, according to the International Energy Agency (IEA).
Mammoth new data centres for hyperscalers — such as Meta, Microsoft, Google and 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 already has 22 such facilities in operation, including 12 in Calgary. Industry giant Amazon Web Services (AWS) unveiled plans three years ago to establish a cloud computing hub in the region.
Last month, Montreal-based eStruxture Data Centers announced a new $750-million AI-focused facility will be built north of Calgary in Rocky View County, which will draw 90 MW of power from the grid.
Alberta has several advantages it can use to attract more facilities, including an expected surplus of electricity over the next few years as new gas-fired power generation and renewable power projects are completed.
As the only province with a deregulated electricity sector, project developers can negotiate directly with private power generators such as TransAlta or Capital Power to build new supply.
Since May, several 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 listed 12 such 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.
Five large AI hubs have been submitted to AESO’s connection list by Beacon AI Data Centres, a private development firm. Its plans include proposed 400 MW centres in High River, Langdon, and the Edmonton area.
Former Alberta energy minister Ken Hughes, a vice-chair of Beacon, noted major hyperscalers need to quickly make their investments in North America for AI data centres, potentially within the next 12 months.
“Alberta is in a race with other jurisdictions, particularly around North America. The sooner that we’re able — as a province, as a community — to land the first AI facility, the better, because others will see that as a validating move,” Hughes said.
“It’s not a slam dunk. It’s a race — but it’s a race in which we have a lot of competitive advantages.”
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 five to 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.
A 1,000 MW data centre, along with the supporting power generation infrastructure, would create in the range of 200 to 250 full-time jobs, Glubish said.
For Alberta to reach its $100-billion target, it would need all 6,500 MW of data centre proposals in the AESO connection lineup to come to fruition, noted analyst Carson Kearl of energy analytics firm Enverus.
It’s not likely the province will become North America’s destination of choice for AI data centres, given states such as Virginia and Texas are already well-established, but it could reach that level within Canada and the northwest U.S., he said.
He noted Alberta’s grid is relatively small, and adding six gigawatts of demand would increase its load by about 50 per cent. It’s also unclear how long hyperscalers will be willing to use gas to generate electricity before they will want to shift to non-emitting sources of power.
“We are making the right moves. The bait is on the hook. How many fish are we going to catch?” Kearl said.
“There’s a lot of hooks in the water.”
Chris Varcoe is a Calgary Herald columnist.
cvarcoe@postmedia.com
Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.
365 Bloor Street East, Toronto, Ontario, M4W 3L4
© 2024 Calgary Herald, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.
This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.
You can manage saved articles in your account.
and save up to 100 articles!
You can manage your saved articles in your account and clicking the X located at the bottom right of the article.
source
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
