Data centre explosion mirrors cannabis boom, event hears

Alberta's current data centre boom bears similarity to what the cannabis industry went through in the late 2010s, a regional economic development summit hosted by CREDA Edmonton Region and the Cities Institute heard. "It's like the new cannabis run in Alberta, where everybody wanted to set up a cannabis grow-op in Alberta, and there were only a few that ended up being successful," Bronwyn Scrivens of JLL said at the Oct. 15 event. "A lot of these warehouses are now being considered for conversion into data centres because they didn't make it." She moderated a discussion featuring four panelists: Matt Sexton, the Iowa-based community engagement manager for Meta; Mark Morrissey, director of economic innovation and growth at Sturgeon County; Lyndsey Rolheiser, a researcher at York University; and Andrew Leach, an energy and environmental economist at the University of Alberta.

Rolheiser presented a paper that provides a comprehensive mapping of Canada's data centre landscape. Canada currently has 194 data centres with 1.6 gigawatts of capacity, but there are another 213 under construction or announced, with a planned 22.2 GW of capacity. Alberta accounts for 92% of that planned capacity. The planned sites are, on average, much larger than existing ones, with an average capacity of 122 megawatts for planned sites compared to 11 MW for active sites. The study found that the larger a project is, the more likely it is to be foreign-owned. About half of small active facilities are owned by U.S.-headquartered firms, while U.S.-headquartered firms account for 84% of project financing, 85% of providers, and 100% of backers and end-users for the planned hyperscale projects. "Costs are local — there are real costs, these include power emissions, water, and land," Rolheiser said, "and returns predominantly accrue outside of the province."

Morrissey of Sturgeon County, where Meta is building a $13-billion data centre, said the changing landscape means municipalities have to treat every project as if it's realistic, even if it doesn't seem so at first glance. "Once upon a time you could kind of look at the project proponent, and if it's Meta, Google, or Suncor, you're pretty sure that that project is somewhat realistic, whereas if it's 'Joe's Data Centres and Electrical,' maybe not," he said. "But you can't even go by that anymore now … Even the most unrealistic project only takes a proponent to come in and buy that capacity, or buy that project, or invest in that project, and it becomes real almost overnight." For his part, Leach said the economics of data centres remain opaque. "What are they selling? What's the market price for that? How do we see that price changing?" he said. "We talk about it as though there's no commodity risk here, but how can we talk about it as … no commodity risk if we don't know what the commodity is, we don't know what the price is, and we don't know what the forward price of that is?"