Premier Danielle Smith in Edmonton on July 25. The premier discussed Wednesday her government's strategy for attracting AI hubs to Alberta.--CP FILE PHOTO
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Efforts to lure artificial intelligence hubs to Alberta could vastly increase power demand, Premier Danielle Smith told reporters Wednesday, but also massively increase power production across the province.
Smith and Technology Minister Nate Glubbish discussed the previously announced plan to win data hub projects while proposing they be coupled with large, new natural gas plants to supply the computing hubs that use more power than a small city.
That would keep the huge power demand from affecting grid prices for consumers, said Smith, and boost the natural gas sector, provincial revenues and local economies and tax bases, including in the southeast.
“The overriding principle is that we’re protecting prices for consumers,” said Smith. “We’re asking AI data centres to bring additional power to the market.”
Massive amounts of new demand, such as for cryptocurrency, have traditionally been coupled with worry about supply availability. In Alberta’s market, price is largely determined by supply-demand curve, but is generally open to new private-sector players to participate.
Smith said areas with large natural gas supply – including, specifically Medicine Hat, she said – would be natural areas of interest for developers.
She felt new natural-gas plants, potentially matched with carbon capture and sequestration facilities, presents the best opportunity for major tech firms to get operating sooner, even those with environmental and low-carbon goals .
“They will be able to get faster if they have a partner that will build them power needed, and hopefully overbuild,” she told the News.
“We know what our base load is on our coldest day … and anything above that incrementally will need to have new power added. We need to be aspirational about this.”
How much power could be staggering.
Glubish said that “10 to 12” global computing firms are in contact with his department regarding proposed facilities. Total investment in North America could be in the “hundreds of billions of dollars” over five years.
“I see it being a brand new 1,000 megawatt gas plant beside a brand new 1,000-MW data centre,” he said. “That’s a lot of land and a lot of value (for local economies).”
This month, the Alberta Electric System Operator began publishing an overview of requests for industrial data load in their application process.
It states a dozen projects would require about 6,500 MW in total, more than half the current demand in Alberta on an average day, and new production to match that would increase generating capacity by one-third.
Two projects are located in the southern region, totalling 800 megawatts of capacity.
For comparison, the average demand in the City of Medicine Hat is about 200-megawatts, including a 42-megawatt contract to supply Hut 8 cryptocurrency.
Another recent report by AESO on grid congestion in the southeast outlines that up to 1 million megawatt hours of power has been curtailed as power line capacity can’t handle exporting a glut of production that has built up over the recent years.
A first phase in the data-centre strategy would focus on projects that would be built with self supply facilities, while a process to connect those and additional projects to the grid would be developed alongside the Ministry of Utilities and Affordability.
In the south, which typically has excess power from wind and solar fields in the summer and certain times of the year, that could be soaked up as part of second-phase planning due in early 2025.
“Some great opportunities to introduce data centres that are fit for that purpose that will use that congested supply,” said Glubbish.
“We’re asking ‘could we pair a data centre that is right sized for that excess power and match it’… The good news for Albertans is that if that happens, their power bill comes down, their transmission costs are going to come down.”
“If we do it right, the opportunity for Albertans is enormous to create so much economic investment and benefits, jobs, bring in more tax revenue and build a strong and more stable grid.”
The City of Medicine Hat power officials has said its independent power company is receiving inquiries from industrial-sized amounts of green power
Smith herself told business audiences in the Hat last spring that the Hat’s natural gas-fired power plant could provide stable, low-cost power to investors and be a hallmark of economic development strategy.
