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By Yogi Schulz
The incredible demand for AI-related computing capacity is driving rapid growth in AI data centres worldwide, as shown in the chart below. The Alberta government is keen to ensure that some of that investment occurs in Alberta and has set a goal of attracting $100 billion in investment by 2030.
Source: AI Data Center Market (2026 – 2033)
Many factors will influence the completion dates for AI data centres. The most likely critical path runs through the availability of GPU chips and natural gas turbines. For once, the critical path won’t run through the regulatory process.
Recently, Pembina Pipeline Corp. and its partners announced plans to build the $4.6 billion Greenlight Electricity Centre, a 932-megawatt natural gas-fired plant in Sturgeon County, north of Edmonton. It’s designed to supply dedicated power to Meta’s massive AI data centre that will cost at least $40 billion.
Alberta offers many advantages for AI data center developers. The advantages include:
- A pro-business culture.
- Abundant natural gas with a significant pipeline distribution system.
- Streamlined regulatory approvals, using a well-defined process.
- Competitive electricity costs.
- A government focused on attracting investment.
- A cooler climate that reduces cooling costs by 20 to 30% compred to Texas.
- An extensive fibre optic network.
- A skilled workforce for construction and operation.
- Excellent airline connections to many parts of the world.
- Lots of available office space at low occupancy rates.
- A time zone that works well for the US.
We can expect many more AI data centre announcements in Alberta. Let’s consider how AESO expects to manage the impact of the proposed AI data centres on Alberta’s electricity generation and transmission systems.
Regulatory permitting process
Project developers always want to simplify and shorten the permitting timeline. The Alberta government is keen to accommodate this desire to a point, but it also needs to demonstrate that:
- The frenzy does not adversely affect consumer electricity prices.
- The likely rapid growth in electricity generation does not threaten the stability of the electricity transmission grid.
- Its application process is reasonable and doesn’t discourage AI data centre developers from investing in Alberta.
AESO’s new permitting process is designed for large electricity generators supplying AI data centers. The process will handle recent load applications totalling more than 20 GW, as shown in the chart below. That compares with Alberta’s peak load of 12 GW. Assuming most applications come to fruition, data centre electricity consumption is expected to more than double Alberta’s electricity grid load.
Source: AESO Update on Data Centres, AESO
Click here to view the Connection Project List Dashboard, which displays all applications on a geographic map.
Regulatory permitting framework
The Data Centre Regulation, passed under Bill 8 in the fall of 2025, established the Bring Your Own Generation (BYOG) permitting framework.
“Policy frameworks that include provisions to power and build data centres — like the Canada/Alberta MOU — should include language that prioritizes firms conducting innovation activities in Canada and ensures Canadian control over strategic data,” says Jess Sinclair, Director, Government Affairs, Prairies, at the Council of Canadian Innovators. “If we are going to go all-in on the data centre economy, we should be looking to create that value here at home.”
BYOG is an electricity grid connection pathway designed to responsibly manage the grid impacts of large new loads, such as data centres. It applies to individual loads greater than 75 MW seeking service that ties to new or existing generation. This load limit ensures the large loads do not negatively impact grid reliability.
The BYOG framework doesn’t require building sufficient, dedicated on‑site electricity generation. It can also include sourcing electricity from other generators on the Alberta electricity transmission grid.
Gap between load and generation
Currently, a significant gap exists between electricity load applications and the generation required to meet them, as illustrated in the chart below.
Under the AESO BYOG process, electricity load applications can proceed only if accompanied by a credible electricity generation application or purchase plan to close this gap.
Source: AESO Update on Data Centres, AESO, March 2025
To connect or not to connect
Data centres or other loads can choose to operate without a grid connection, relying solely on on-site electricity generation. Most load applications choose to connect to the grid for additional flexibility and reliability.
Large-load applications often trigger an AESO connection study to determine whether upgrades to the transmission system are needed beyond the project’s local connection. In most cases, the project developer will have to pay for a transmission upgrade if the project is sourcing electricity from other generators.
Data centre development outlook
AESO has received over 30 large load applications related to data centres. The outlook for the actual development and timing of all these data centres is dependent on many factors, including:
- Arranging financing for the multi-billion-dollar facilities.
- Receiving final AESO connection approval under the BYOG process.
- Receiving final development approval from the relevant municipal district or county.
- Purchasing graphic processing unit (GPU) chips that are in high demand globally.
- Securing an arrival date for the natural gas turbines that are only available after long lead times.
- Concluding the construction of the data centre.
- Concluding the construction of the related transmission system upgrade.
- Concluding contracts to use the computing capacity where the developer or operator does not plan to use the capacity internally.
It’s reasonable to expect that a few of the current AESO load applications will be deferred or cancelled at some point during the approval and development process because the project failed to solve one or more of the factors listed. Those events will reduce the growth rate of the Alberta electricity grid.
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THE AI DATA CENTRE OPPORTUNITY: How Will Alberta Approve the Incredible Demand for Electricity From AI Data Centres? – Yogi Schulz