As province pushes data centres, Edmonton operator says challenges await
The Alberta government's work to lure data centres to the province and spur artificial intelligence could be a costly effort that exceeds the capacity of our electrical grid and highlight how expensive our electricity is, says the operator of several independent data centres in Edmonton.
"We have something like five or 10% of the expected data centre capacity we'll need for the next five or 10 years," Dale Corse, the CEO of Wolfpaw Data Centres, told Taproot about the Edmonton region. "Could we handle an AI boom? No, absolutely not."
Data centres routinely make news in Edmonton nowadays, yet people rarely get to understand what they are, how they work, and what their business model is. Taproot set out to discover these details from Corse at Wolfpaw, which is one of at least six operators of commercial data centres in Edmonton. Wolfpaw has been in operation since 1998, and has spaces at Rice Howard Place and within two Rogers facilities in town.
The provincial government's goal is to build the data centre capacity that an AI boom would need in Alberta. Its Artificial Intelligence Data Centres Strategy, rolled out in December, sets to develop Alberta's electrical capacity, solve cooling challenges for data centres, and ultimately drive economic growth by seeing companies invest to build centres and AI to use them. The strategy lists objectives for each of these goals, and a map of actions that includes modernizing regulations and collaborating with municipalities. When announced, Minister of Technology and Innovation Nate Glubish said he wants to see $100 billion invested in data centre infrastructure in Alberta over the next five years.
What's a data centre?
"A data centre is a place where you would rent space — either physical space or possibly computer space — to put your IT stuff so that it stays online all the time," Corse said.
Data centres house the computers needed to power the internet, the applications and storage that companies rely on, and increasingly, the computing power needed to create services that use AI.
Corse said the two key functions of a data centre are to keep the electricity on, even during a power outage, and to keep the computers cool. "A data centre would be expected to be able to deal with all of those problems for you so that as a company, you can just concentrate on your business and don't have to also be an IT company on top of trying to do your day to day," he said.
Wolfpaw's facility at Rice Howard Place consumes 5,000 square feet and can draw up to 400 kilowatts of electricity at a time. The company has redundancies, including generators, for its power and cooling to ensure its operations never go down, Corse said. Right now, the centre draws around 200 kilowatts for its clients. By contrast, Corse estimated the average household draws a maximum of 10 kilowatts at any given time.
How does the business work?
A data centre's biggest expense is electricity, Corse said. Real estate is "one of the smaller numbers on the balance sheet," he added. The input cost of electricity is the greatest hurdle, he said, and even building the infrastructure to supply it is pricey.
It costs between $8 million and $10 million to build one megawatt, or 1,000 kilowatts, of data centre power, Corse said. "Some of these AI guys, (they) come to us and they want three megawatts of power. OK, well, that's $30 million worth of equipment just to run it, and then you have the input cost (from electricity) on top of it. So it is a great business, so long as somebody can afford to pay for that. Is it a great business for the small guy? Maybe not."
