Will Alberta's push for AI data centres affect my power bill? | Daily Hive

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While the Alberta government says massive new AI data centres won’t drive up electricity costs, one energy expert says the reality is more complicated than that.

Alberta’s “bring your own generation” model requires large new electricity users such as data centres to supply their own power. But Kari Hyde, director of customer energy solutions at the Pembina Institute, says that won’t necessarily shield Albertans from higher electricity bills.

“Bring your own generation is a useful starting point, but it’s not an affordability strategy,” Hyde said.

Meta’s $13-billion, one-gigawatt data centre to be built in Sturgeon County is an example of the scale of electricity demand Alberta hopes to attract. Hyde says a one-gigawatt load is roughly equivalent to the electricity needed to power 750,000 homes.

But while a data centre may bring its own generation, that doesn’t mean it will operate independently of Alberta’s electricity system.

“If something happens with the generation that the data centre brings, and there’s an outage or period where generation is unavailable, the electricity system still has to plan around that load and make sure it has the infrastructure to support it,” Hyde said.

That can mean new transmission lines and other grid upgrades, which Hyde says could ultimately be shared by electricity customers.

“Generation is only part of the costs that matter when you’re connecting to our system,” she said. “There are other additional costs that people have to all ratepayers.”

Those infrastructure costs can be high, Hyde said, noting they are fixed costs that can last for decades.

While she says it’s too early to put an exact dollar figure on what those costs could look like, Hyde explained that large electricity loads can put upward pressure on system costs when they require new infrastructure, increase reliance on natural gas generation or operate inflexibly during periods of high demand.

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She pointed to Alberta’s January 2024 grid emergency, when Albertans were asked to immediately reduce their electricity use as extreme cold pushed demand on the grid to record levels, as an example of why flexibility matters.

The Alberta Electric System Operator (AESO) has indicated data centres would curb their energy use if necessary during an emergency, Hyde said, but she argues that flexibility should be built into the model from the beginning.

“So we’re saying if you can bring some flexibility, like they’re doing in other jurisdictions, that would be super helpful right from the get-go.”

The need for flexibility is also reflected in the Guide to AESO Connection Requirements for Transmission-Connected Data Centres. According to the guide, the AESO sets a limit for how much electricity demand the grid can safely lose at once.

If a large data centre suddenly drops off the grid after its on-site power fails, and that loss exceeds the limit, it could trigger intertie trips and even widespread outages. That’s why the AESO may require some facilities to have “ride-through capability,” allowing them to stay online through brief disruptions instead of immediately disconnecting.

Hyde also argues Alberta shouldn’t default to natural gas generation for new data centres. Instead, she says projects should be evaluated on whether they provide enough generation, storage, backup power and flexibility to avoid shifting costs onto other electricity customers.

“With solar and wind power, quite often you have storage and backup batteries anyway. So it’s a great way to store excess energy at times and send it back to the grid when it’s needed.”

She points to jurisdictions such as Quebec, which has proposed higher electricity rates for new large data centres, and companies like Google, which have agreed to reduce power use when grids are strained, as examples of how the industry can help manage demand.