Alberta's power grid 'cannot possibly connect' all proposed data centres, system operator says

The Alberta Electric System Operator (AESO) is introducing temporary limit on how many new data centres can be added to the electrical grid, as the province experiences un unprecedented surge of project proposals.

AESO, the independent operator of Alberta's electrical grid, will enable up to 1.2 gigawatts for new large-load data centres in Alberta until 2028. The cap applies to large-load projects that equal or exceed 75 megawatts.

But the 29 proposed projects would demand more than 16 gigawatts combined, a level of demand the province has never experienced, said AESO CEO Aaron Engen.

"Alberta cannot possibly connect all those proposed data centre projects in the short term," said Engen.

"We need to develop an approach to approve data centre connections that, No. 1, don't negatively impact grid reliability; No. 2, that can facilitate data centre investment development as early as [2027-28]."

To illustrate the level of demand Alberta is seeing, AESO noted that the city of Edmonton has a load of roughly 1.4 gigawatts.

AESO added that it believes the additional 1.2 gigawatts could still unlock billions of dollars in investment in data centres.

But Engen said the agency cannot connect new projects if they would compromise the grid's reliability. AESO's limit, he added, is meant to preserve the system's integrity provincewide, while still enabling some data centre development.

"This is a very competitive industry right now and people want to get real estate, want to be built, want to have something operating as soon as possible," Engen said.

"That's why we're talking about just freeing up, if you will, [1.2 gigawatts] of supply for people to get some development today."

Late last year, Alberta Technology Minister Nate Glubish said he hopes to see $100 billion worth of artificial intelligence data centres under construction within the next five years. The centres are typically filled with computer servers used to develop and train large-scale artificial intelligence models.

The Alberta government has also highlighted the province's deregulated electricity market as a draw for operators, who can use it for off-grid power generation.

If the generation is completely off grid, it doesn't come to AESO to facilitate these applications. But Engen agreed that the bring-your-own-generation concept makes perfect sense, and that data centres setting up their own power generation could be a sensible way to develop more projects.

AESO has filtered the number of proposals to 15 through the organization's process for consideration. Rob Davidson, AESO vice president of grid reliability, projects and planning, said more projects could be filtered out over the next month.

"It will be all dependent upon each of those projects' ability to get letters of support from their municipality and produce their financial security," Davidson said.

AESO doesn't know yet how many of the project proposals are for AI, cloud services or cryptocurrency, he said. But before approving them, the organization will need to understand the operations of each centre and how they would impact the grid.