Think tank warns of costs of gas-powered data centres

A $4.6-billion plant to be built in Sturgeon County to generate power for a data centre will likely contribute to increased electricity costs for Albertans, says the Pembina Institute, an energy think tank. The Calgary-based Pembina Pipeline Corp. (no relation), Morgan Stanley Infrastructure Partners, and Kineticor Asset Management have decided to proceed with the Greenlight Electricity Centre, which is expected to generate at least 932 megawatts when it comes on stream in 2030. "We're proud to be first movers in meeting Alberta's large-scale data centre power needs and helping establish the infrastructure required to support this rapidly growing industry," said Scott Burrows, the pipeline company's CEO.

Premier Danielle Smith has said the province's "bring your own power" model will keep electricity affordable and reliable. "By having data centres bring their own generation and pay for related power infrastructure, this framework ensures that projects like this one will actually reduce transmission costs on Alberta's utility bills," Smith said at a news conference about the Greenlight project. But David Pickup, the Pembina Institute's director of electricity, said the project will increase demand for natural gas. "This, combined with Prime Minister (Mark) Carney's announcement today that Canada intends to triple (liquid natural gas) exports over the next decade, will expose Albertans to much more intense market competition for the gas they rely on heavily to heat their homes and power their grid," Pickup said in a release. He noted the missed opportunity to include wind and solar in the energy mix, and called the decision "yet another indicator of how Alberta structurally locks in demand for gas above all else."

Opponents have also raised concerns about the environmental and social consequences of data centres. Land-use ecologist Brad Stelfox submitted a report to the Alberta Utilities Commission suggesting that communities near data centres will experience increased water demand leading to water scarcity, as well as noise, light, and air pollution. Similar concerns led Manitoba Premier Wab Kinew to reject a large AI data centre proposed for farmland south of Winnipeg, citing environmental and economic drawbacks. Some residents in Olds are also rallying against a proposed data centre, powered by 1.4 gigawatts of electricity from burning natural gas.