Alberta’s ambitions to become a leading hub for data centres, particularly in the burgeoning AI sector, are facing headwinds due to the province’s current approach to grid management. While aiming to attract $100 billion in investment and secure a top-tier position in North America for AI data centres, Alberta’s strategies are reportedly deterring major tech companies. The crux of the issue lies in the Alberta Electric System Operator’s (AESO) restrictions on new data centre connections to the power grid, a response to unprecedented demand.

The AESO is currently limiting new connections to 1,200 megawatts to safeguard grid stability, a figure significantly below the power needs of major tech players, often referred to as “hyperscalers.” This cap sends a signal that Alberta may not be adequately prepared to handle the large-scale investments these companies require. The Alberta government supports the AESO’s focus on reliability and affordability for Albertans, but acknowledges the need for a long-term framework to address future data centre requirements.

First Nations communities are actively seeking opportunities to participate in the data centre boom, envisioning economic benefits such as job creation and training programs. However, they express concern that the current restrictions are limiting their potential involvement and advocating for equity stakes in data centre projects. Chief Tony Alexis of the Alexis Nakota Sioux Nation emphasized the need for Alberta to “open the stadium doors wide enough so that the star players can participate and everyone wins.”

The surge in demand has been described by AESO CEO Aaron Engen as “a level and volume of load connection requests Alberta has never seen.” Acknowledging the situation, a spokesperson for Affordability and Utilities Minister Nathan Neudorf stated that the government’s goal is for Alberta to be “the destination of choice for AI data centres,” while simultaneously protecting the electricity affordability and reliability for Albertans and First Nations.