A proposal by the Alberta Electric System Operator (AESO) to power data centres in the province will only allow natural gas-powered projects to connect to the grid. The June proposal states that gas-fired thermal generation can operate in all weather conditions, can handle high electric loads and passes the “electrical island” test, meaning it can provide stable power without grid access. Renewables, hybrid facilities and standalone energy storage facilities are excluded because they don’t meet those requirements it says. “There are jurisdictions like Germany and Ireland that are going in the exact opposite direction. They’re saying, ‘Bring your own power, it must be renewables.’ So Alberta is basically going against that trend globally,” said Solar Alberta Executive Director Heather MacKenzie in an interview with CTV News Edmonton. MacKenzie calls the AESO’s proposal for the next phase of its Bring Your Own Generation (BYOG) process “short-sighted” considering how far battery storage systems have come. “You can simply require that batteries be combined with solar and wind and then you actually have the most reliable form of electricity because batteries can be turned on in a moment’s notice,” said MacKenzie. The national trade association Energy Storage Canada (ESC) was among more than two dozen stakeholders that weighed in on the AESO proposal. “The position we put out is that immediately the AESO should be allowing eight-hour batteries to participate,” ESC policy manager Robert Tremblay told CTV News Edmonton. “The longest time there’s been these kinds of runs of scarcity has been seven hours in the last 10 years.” Tremblay said AESO isn’t allowing competition to happen by limiting generation to natural gas. “That will lead to inefficient outcomes and higher costs.” Emissions concerns Clean energy think tank The Pembina Institute also told the operator it should take a “technology agnostic approach” arguing renewables, energy storage and dispatchable thermal backup can compare to natural gas at a lower cost and with lower emissions. “If we’re ramping up the use of natural gas for data centres but also for other things, really those emissions that we saved by getting off coal are really going to come back in a big way,” David Pickup, director of electricity for The Pembina Institute, told CTV News Edmonton. Alberta completely phased out coal-fired electricity in June 2024, six years ahead of schedule. The province estimates the move helped avoid 290 million metric tons of greenhouse gas emissions between 2015 and 2030, the equivalent to the annual use of more than 67 million gas-powered vehicles, according to the US EPA greenhouse gas calculator. Pickup said once the new natural gas plant connected to Meta’s Sturgeon County data centre comes online, it will generate about 10 per cent of Alberta’s total electricity emissions. The data centre will have similar power demands to the entire city of Edmonton at around 1,000 megawatts (MW). “We’re really in the era of climate change impacts today and continuing to and even growing the amount of emissions that we have is only going to exacerbate those impacts going forward,” said Pickup. While large data centres are asked to bring their own power generation, AESO is permitting some companies to connect to the grid temporarily. The province says companies have requested about 20,000 MW worth of power for data centres, though AESO has only allocated 1,200 MW so far. The operator’s June proposal indicates its next round of intakes can receive up to 1,600 MW of grid capacity. Utilities minister weighs in on emissions and generation Alberta’s utilities minister told CTV News Edmonton people across the province and country can be assured “we have the most strict environmental standards and air monitoring.” “Obviously we continue, as a government, to make sure we’re taking a look at it on a consistent basis and locating power generation in areas that make sense,” said RJ Sigurdson in an interview last month. The province says before approval, a company must model its emissions and demonstrate they stay within Alberta’s Ambient Air Quality Objectives at every location around the site. In response to concerns over AESO limiting generation options, Sigurdson says Alberta’s abundance of natural gas is what’s driving interest in these investments. “What they need is predictable, reliable and something they know can work 24/7, 365 and right now, natural gas is the most secure and affordable energy that they can build to be able to supply these data centres,” he said. Sigurdson says, at times, Alberta generates far more power than it uses, so providing bridge power to data centres makes sense. “This has been received really well by the proponents that are looking to invest in Alberta because it gets them what they call ‘speed to power’ and gets them to market quicker.” He says Alberta as a whole has “very diverse power generation” and “supports all technologies”, adding companies with data centres not connected to the grid can incorporate any technologies they’d like. “That’s an independent business decision by these data centres,” he said. “The conversations that I’m having is that they’re looking at all those as options in the future.” Grid operator’s response AESO’s deadline for feedback on its proposal was mid-July. While it initially said its BYOG framework would be released in August, a September update said it will come this fall. AESO declined an interview but said in a statement that renewables, hybrid facilities and standalone energy storage cannot offset a data centre’s around-the-clock draw the way dispatchable gas generation can. “Data centres are free to use renewables and storage to supply their facilities if they decide to limit their load needs from the grid or not to connect to the grid at all,” it reads. It also states “new technologies or performance improvements may allow more qualifying types in the future.” AESO said further information will be shared with stakeholders this fall and will be publicly available online. This is the second part of a series by CTV News Edmonton on data centres in Alberta
