Data centres will pose 'challenge' to decarbonizing Alberta's electricity grid: TransAlta CEO

Article content

The spectre of an influx of data centres coming to Alberta will likely provide new difficulties for the province’s electricity grid, the CEO of Calgary-based TransAlta said Tuesday.

The electricity-intensive technology is both a new opportunity and problem for the Alberta government, which has gone on the offensive in attempting to attract companies to build their AI hubs in the province.

Article content

Though Alberta may be the best-equipped Canadian province to undertake such a challenge due to its deregulated market structure, building out those centres may come at the expense of federal decarbonization targets, John Kousinioris, CEO of Calgary-based TransAlta, said at Energy Disruptors: Unite conference on Tuesday, one of the city’s largest annual energy sector conferences.

“It’s going to be a challenge to hit all of the holistic targets that we have,” Kousinioris said during a panel discussion.

The Alberta government has recently made a concerted effort to promote the province as a data centre destination. Technology Minister Nate Glubish travelled to San Francisco in mid-September to meet with tech companies and investors, including Meta, Amazon Web Services, Microsoft and Salesforce. In doing so, the province is encouraging companies to partner with electricity companies to provide their own generation.

The Alberta Electric System Operator (AESO) has at least six data-centre applications in the early stages of development that would use about 3,000 megawatts (MW) of power. Five of those AI hubs have been submitted by Calgary-based Beacon Data Centres Inc. (There may be more than six applications because the AESO, the utility organization responsible for operating Alberta’s power grid, does not require projects to self-identify as data centres.)

Article content

Article content

Amazon announced in 2021 it was bringing a cloud computing hub to Calgary, bringing with it $4.3 billion in investment.

Kousinioris said he’s observed states in the U.S. that have seen a boom in data centres and faced electricity demand issues as a result. Permitting gas plants and wind turbines currently takes two to three years on average, he said, increasing the challenge of building out the power grid to support this new generation.

Bringing the grid to net-zero by targets such as 2035, as the federal government has set out in its Clean Energy Regulations, will likely be a challenge — particularly while keeping electricity affordable for consumers, he said.

“It’s easy to say we’re entering into this unprecedented and unbelievably exciting period, and we’re going to decarbonize and be able to meet all of the electricity demand that we need. And I think it’s going to be bloody tough. I hate to say it, I think it’s going to be hard to do it because it’ll be hard to do it in an affordable way,” Kousinioris said.

Article content

Decarbonization is also not driving investment decisions, Kousinioris said.

“They want 99.9 per cent reliability and they want speed. At least in Alberta, we can’t provide that in a green way right now.”

Alberta’s electricity grid has been strained several times over the past year during both extreme heat and cold events. Investors’ top mandate, Kousinioris said, is to have reliable and affordable power.

Though nuclear power has been floated as an option to supplement the energy needs data centres will create — a faraway reality for Alberta — Kousinioris said the province would need to reform its entire electricity market. Alberta has an energy-only electricity market in which generators are only paid for the energy they produce.

“How do we do that in Alberta with our energy-only, price-clearing every hour — you can’t make that investment here.”

— With files from Chris Varcoe

mscace@postmedia.com
X: @mattscace67

Article content