By Amanda Stephenson
CALGARY, June 9 (Reuters) – Alberta is touting its plentiful provide of low cost fossil fuels to entice tech firms to construct knowledge facilities for the AI increase, a transfer that might undermine Canada’s plan to hyperlink new knowledge heart improvement with clear vitality enlargement.
Canada is the world’s fifth-largest producer of pure gasoline, round 60% of which comes from Alberta. As effectively as big fossil gasoline reserves, the western province boasts a cooler local weather that may offset the cooling prices of information heart infrastructure and loads of accessible land. All that may make working knowledge facilities extra cost-efficient than in america, the place they’re dealing with pushback from communities and lawmakers.
Tech firms may additionally create a brand new marketplace for long-suffering pure gasoline producers in Western Canada, the place drillers face a multi-year provide glut and at occasions have needed to pay prospects to take their gasoline when costs have turned unfavourable.
However a speedy enlargement of information facilities in Alberta would disrupt Canada’s plans to energy the AI increase utilizing clear hydro, renewables and nuclear. Whereas pure gasoline is a cleaner energy supply than coal or oil, as a fossil gasoline it nonetheless contributes to emissions.
Prime Minister Mark Carney has mentioned Canadian knowledge facilities will run on “a few of the cleanest energy on the planet.” His authorities’s June 4 AI technique — which goals to hurry up Canada’s adoption of synthetic intelligence — highlighted how greater than 83% of the nation’s electrical energy grid comes from renewables and low-emission energy sources.
Canada at present has solely 5 functioning knowledge facilities on the so-called hyperscale stage, demanding a minimum of 50 megawatts of electrical energy capability, equal to the ability wants of a small metropolis.
However almost 100 extra are within the works and 90% of these are deliberate for Alberta, the place the emissions depth of the province’s electrical energy grid is nearly 5 occasions the nationwide common, analysis from York College exhibits.
“We’re basically taking a look at these knowledge facilities as digital pipelines and digital refineries for us to assist get the worth from our pure gasoline to international markets, however in a inventive fashionable approach,” Alberta’s Expertise Minister Nate Glubish mentioned in an interview.
The province goals to draw C$100 billion in knowledge heart funding. Glubish mentioned he has made a number of journeys to Silicon Valley since 2024 to courtroom energy-hungry tech giants with Alberta’s pure gasoline pitch.
The 20 current small- to mid-scale knowledge facilities in Alberta already pull from the province’s vitality grid, which is 60% powered by pure gasoline. The provincial authorities is giving new proponents the choice to construct their very own energy sources to keep away from limits on energy capability.
Julia Sawatzky, a health care provider and member of the advocacy group Canadian Physicians for the Setting, mentioned there was a rising discrepancy between Canada’s said environmental targets and the fact on the bottom.
“There appears to be an concept or a imaginative and prescient that Canada might be a inexperienced financial system or a spot that is assembly its local weather targets,” Sawatzky mentioned. “However the best way this AI knowledge technique would possibly truly roll out, I feel, is trigger for all of us to actually concentrate.”
A spokeswoman for Canada’s federal division of innovation didn’t touch upon how Alberta’s proposed buildout of pure gas-fired knowledge facilities fitted with the nation’s clean-power AI technique. She mentioned Canada will align new knowledge heart improvement with clear vitality enlargement, sturdy environmental requirements, and advantages for native communities.
An Alberta authorities spokesperson didn’t reply to requests for remark.
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Many tech giants have local weather and emissions targets, which in concept would put Alberta’s pure gas-based electrical energy grid at an obstacle to different Canadian jurisdictions equivalent to Quebec, with its low-carbon hydroelectric grid.
However Glubish mentioned the businesses he’s in talks with are extra involved with energy availability, and the flexibility to connect with the grid rapidly. He declined to call the businesses.
Combining pure gasoline with carbon seize and storage — a know-how which goals to lure emissions from industrial processes and retailer them underground — may in future assist tech firms preserve their local weather targets, Glubish mentioned.
Tech firms Amazon, Alphabet and Microsoft already function knowledge facilities in central Canada, however on a smaller scale than in the U.S., which presents hyperscalers higher tax incentives and proximity to prospects.
Main hyperscalers Meta and Microsoft declined to touch upon whether or not they plan to increase in Alberta, whereas Alphabet didn’t reply to a request for remark. An Amazon spokesperson mentioned the corporate has invested in two photo voltaic initiatives and one wind challenge in Alberta, which assist energy its current knowledge facilities.
Alberta-based Pembina Pipeline and accomplice Kineticor are anticipated to make a remaining funding resolution by the top of June on a proposed 900 MW pure gas-fired producing facility they’re growing for a buyer with plans to construct a large-scale knowledge heart within the province.
Pembina declined to call the client, however on a current convention name, CEO Scott Burrows mentioned the info heart challenge will create incremental demand for pure gasoline.
“The entire trade is falling all over ourselves to discover a approach to attract funding right here to extend demand for our vitality and to keep away from the commodity in any other case being wasted at rock-bottom costs,” mentioned Mike Belenkie, CEO of pure gasoline producer Benefit Power.
(Reporting by Amanda Stephenson in Calgary; Enhancing by Caroline Stauffer and Nia Williams)
