Alberta wants to build huge data centres for AI. That could bring a big emissions challenge
Electricity sector emissions could double, similar to when Alberta used coal, says expert
Earlier this month, Alberta Technology Minister Nate Glubish unveiled his ambitious plans to see $100 billion worth of artificial intelligence data centre infrastructure built in the province over the next five years.
Such data centres are integral when it comes to supporting power-hungry artificial intelligence.
Glubish has suggested Alberta has an advantage as a destination for such projects: its deregulated electricity market means data centre operators can utilize off-grid power generation, and its cold climate comes in handy given the heat generated by such facilities.
To be sure, governments around the world have locked in on the artificial intelligence adoption race in recent years. A recent report from the RBC Climate Action Institute stated that AI-driven data centre expansion in Canada could offer significant economic benefits, enhanced data sovereignty and strengthened cybersecurity, and could boost productivity across various sectors.
WATCH | Alberta government looks to attract data centres to the province:
And though the opportunity could be immense, so too could be the challenges tied to Alberta's climate goals.
The province has made huge strides in reducing overall emissions from its electricity sector by ramping up renewable energy and completely phasing out coal power plants. Now, all that progress could be wiped out.
On Tuesday, Canada pushed its target to achieve a net-zero electricity grid to 2050, having previously aimed to fully decarbonize by 2035. Alberta has said it supports the implementation of a carbon-neutral power grid by 2050.
Research has suggested that a single query run through the generative artificial intelligence chatbot ChatGPT consumes 10 times more power than a standard Google search. More advanced uses of AI, such as the generation of photos, use significantly more power.
"AI's energy-intensive nature raises concerns about power availability, grid reliability and its implication on emissions," reads the RBC report.
Could double electricity emissions, says economist
RBC stated that if all data centre projects currently being reviewed by regulators proceed, they would account for 14 per cent of Canada's total power needs by 2030.
The Alberta Electric System Operator (AESO) says 12 data centre projects are now in the assessment phase, representing 6,455 megawatts of load.
If that's all built, it would roughly double Alberta's electricity greenhouse gas emissions, said Blake Shaffer, an economist with the University of Calgary who specializes in electricity markets.
"[That's] about the same level when the province was powered by coal," Shaffer wrote on Bluesky.
In 1990, electricity generated in Alberta emitted 950 grams of CO2 emissions per kWh. By 2022, emissions intensity decreased to 470 grams of CO2e per kWh, according to federal government statistics.
Andrew Leach, professor of economics and law at the University of Alberta, said he'll believe in such investments when he sees them.
"I would [say] that this is likely one of those cases where we know data centres are being built all over the continent, and they will flock to cheap energy among other things. I don't think it's surprising that people are, at least speculatively, looking at how they might use our startlingly cheap natural gas right now," Leach said in an email.
"Will make it even harder for the province to reach the premier's net-zero by 2050 goals if we're burning all the gas here to run data centres, though."
Minister says CCS can provide path
In an interview with CBC News on Tuesday, Glubish said three main options are available to power data centres today: nuclear, hydro and natural gas.
"Natural gas is really the only option for the next three to five years. And that's why we've been pushing this approach in Alberta, which is, we have virtually limitless natural gas," Glubish said.
"We're really good at developing this. We can help you get projects built here and help you to scale."
He said operators could achieve net-zero natural gas by utilizing carbon capture, utilization and storage (CCS).
"What we've been telling all the different data centre folks is to say, 'Look. If you want to build in Alberta, we can build natural gas, and you can either do carbon capture right out of the gate, or you could plan for it down the road,'" he said.
"But you can absolutely have a net-zero natural gas option. And what's even more compelling is that it's for a fraction of the cost of nuclear or hydro."
In June, a report from Deloitte stated the cost of CCS projects is very high. In many cases, it is "economically unviable," the report read.
Glubish acknowledged that CCS isn't cheap right now, but referenced the $16-billion Site C hydro dam in northeast B.C., which is now generating power.
"It's orders of magnitude more than what it would cost for the same amount of power generation with natural gas," he said.
"There's absolutely a path to net-zero natural gas power generation for data centres. And it's the nearest-term option that can be built right now with today's technology."
Projects take shape
Speaking in October during an energy conference, John Kousinioris, CEO of the Calgary-based TransAlta, said the electricity power generator is having certain kinds of discussions around data centres.
"The decarbonization discussion … isn't driving the decision-making. It's speed," he said. "Do you have a grid connection? How quickly could I get power from you? Time to power, candidly, would be the No. 1 thing."
While green energy isn't currently driving decision-making in Alberta, that could change in the future, he said.
"There's ways that we can use our portfolio to decarbonize the offering. But they want 99.9 per cent reliability, and they want speed. And, I don't know how you, at least in Alberta ... we can't provide that in a green way right now," he said.
About a week after the Alberta government said it would seek $100 billion worth of artificial intelligence data centre infrastructure, celebrity investor Kevin O'Leary outlined his proposal for what he calls the world's largest artificial intelligence data centre.
Called Wonder Valley, it would be built in the Municipal District of Greenview, near Grande Prairie, Alta., with a total investment over the lifetime of the project of more than $70 billion, according to a news release.
O'Leary Ventures has pitched a goal of providing 7.5 gigawatts of power generation capacity, fuelled by off-grid natural gas and geothermal energy.
WATCH | Why Kevin O'Leary is pitching an AI data centre south of Grande Prairie:
While geothermal energy holds great potential in Alberta, particularly in the Peace region, it remains a still-developing technology with no large-scale commercial deployment in North America, said Jason Wang, a senior electricity analyst with the Pembina Institute, a clean-energy think tank.
That makes the reliance on natural gas — the price of which is currently cheap but notoriously volatile — a questionable choice for powering data centres, according to Wang.
"The emissions from these gas plants is also going to be an important factor to think about, because Canada has a goal to decarbonize our electricity grid. Alberta has a goal to decarbonize electricity and the entire economy," Wang said.
"This proposal doesn't seem to be looking at the ways to mitigate those emissions from the gas side of the generation."
The RBC Climate Action Institute said using natural gas for data centres does raise emissions concerns.
"If natural gas powers six additional gigawatts of data centres, annual emissions could rise by 16 million tonnes of CO2e — a three per cent increase in Canada's total emissions," the institute said.
Despite that, carbon capture and storage could throttle the rise of emissions, the institute said.
"In Alberta, companies are already in discussions to incorporate carbon capture into gas-fired power plants for data centres," the report reads.
Such developments would alleviate environmental concerns, leverage existing energy infrastructure and drive further investments in natural gas production and the development of CCS, the institute wrote.
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With files from The Canadian Press, Kyle Bakx and Emily Rae Pasiuk