CDN NEWS | 
US NEWS 
‘The big thing about data centres is they cannot rely on intermittent power … If you want to move quickly, all roads lead to natural gas, and so we’ll be seeing, I would hope in the coming months, some more announcements,’ said Premier Danielle Smith
By Chris Varcoe
This Article and More From Chris Varcoe Here
How confident is Premier Danielle Smith in her government hitting its goal of attracting $100 billion in data centre development within five years?
The premier quickly points out that it’s only been a few weeks since the federal government suspended its Clean Electricity Regulations (CER), which were widely seen as an obstacle to such developments.
The suspension, along with an agreement by the province to hike its industrial carbon price, was a key element in the new Ottawa-Alberta memorandum of understanding on energy that was reached in late November.
And with the federal electricity regulations on the sideline, it’s an important change the province and industry players believe will help propel more projects forward.
“That was our biggest barrier. There was no way that anyone was going to develop new gas-fired generation if they face the prospect of having to turn it off in 2035,” Smith said in a year-end interview.
“The big thing about data centres is they cannot rely on intermittent power . . . If you want to move quickly, all roads lead to natural gas, and so we’ll be seeing, I would hope in the coming months, some more announcements.”
The province is talking with proponents looking to build gas-fired electricity generation facilities that are needed to power new data centres.
Since the MOU was signed, Alberta Utilities Minister Nathan Neudorf said he’s heard positive response from generators about making potential investment in gas-fired facilities that can effectively operate beyond 2035.
The change also makes the province’s $100-billion target more attainable, he added.
“Within two days, I heard of nearly $6 billion of projects being kicked around, and now . . . we’re expecting that could reach $18 billion and growing. And that’s just the generation side,” Neudorf said Wednesday.
“It becomes a lot more real . . . we may not get all of the way there, but we’re going to see significant positive investment within the province of Alberta.”
The CER was designed to reduce emissions from the electricity sector, starting in 2035, and the rules established a life span for gas-fired facilities.
The federal decision to suspend the rules as part of a broader energy accord arrives as more than 30 proposed projects, representing almost 20 gigawatts (GW) of potential load, have applied to connect to the provincial transmission system.
However, the CER made it largely uninvestible to put money into building new gas-fired plants needed for data centres, said Andrew Plaunt, CEO of Kineticor Asset Management.
The Calgary-based company is working on the proposed Greenlight Electricity Centre, with partner Pembina Pipeline, which would power a large data centre project in Sturgeon County, northeast of Edmonton.
Plaunt called the CER’s suspension a “massive, massive victory” for Alberta.
“It was a huge problem,” he said Wednesday.
“Based on how much the world has changed in the last 18 months with data centres, it would never have allowed Alberta to really be successful at attracting (them).”
Earlier this week, Data District — a division of the Swiss asset management firm Alcral AG — and Technologies New Energy (TNE) unveiled plans to spend more than $1.2 billion and build four data centre projects in the province.
“Energy was a big, big factor. I would probably say energy might be almost the biggest factor in our decision,” Data District CEO Carlos Caldas told the Edmonton Journal.
TNE’s chief operating officer Ricardo Eiras said Wednesday the suspension of the CER wasn’t a factor in its decision to locate in Alberta, “but it is a plus,” as the company will use some gas-fired generation initially.
The first data centre site will be in Olds.
“The time to market is something which is highly relevant,” he said.
“We, of course, rely on gas to make sure that we can operate properly while we also have environmental objectives, and step by step, we will reduce our exposure as well to some emissions.“
One year ago, the province rolled out its plan to attract investment for new AI-focused data centres into Alberta.
The government touted the ability of developers to secure land, move quickly through the permitting process and use Western Canada’s ample gas resources for necessary power generation. Data centres require a lot of reliable electricity for computing and cooling systems.
There is some excess power available in the province. The Alberta Electric System Operator (AESO) moved in June to provide about 1.2 GW to data centre projects, saying it could do so without negatively affecting grid reliability.
However, the province has also called on future data centre developers to team up with generators to build their own electricity supply.
The suspension of the CER in Alberta is pending a new agreement between the two levels of government that would see the province’s industrial carbon price increased to an effective rate of $130 per tonne.
Meanwhile, Pembina Pipeline said Monday the company and its partner, Kineticor, are continuing work on the Greenlight Electricity Centre, a large gas-fired generating facility planned for a potential customer.
The multi-phased development would have an overall capacity of up to 1.8 GW. A final investment decision is expected in the first half of next year, Pembina said in a news release.
While relaxing the CER will make it possible to add gas-fired electricity, there are other issues for data centre proponents to consider, said Ian Nieboer, managing director and head of energy transition research at analytics firm Enverus.
Key hurdles include obtaining the approval of municipalities for new projects, obtaining access to water, signing on customers — and how quickly developments can reach the market.
“There are a lot of potential sites, when you look across North America that, in principle, could work to add data centres,” he said.
“And they’re all competing for that capital.”
Chris Varcoe is a Calgary Herald columnist.
[email protected]
Share This:
