Varcoe: Massive new Alberta data centre proposal takes form, as municipal leaders face questions from 'wary' public

It’s the type of massive economic development prize that Alberta communities typically pursue with zeal.

The potential economic benefits of the proposal are eye-popping: an estimated $5 billion of capital spending in a first phase, with 1,000 construction jobs, at least 150 operations positions and the potential for up to 700 over time.

It could inject $24 million of municipal tax revenue annually, while the province would garner $65 million through a levy, according to the proponents.

The newly named Boreal Technology Hub data centre in Parkland County would be located in an area with other industrial development and has well-known, capable proponents.

However, in an era of growing data centre concerns, there are also plenty of questions.

“People are really wanting to make sure that all the due diligence is being done,” said Parkland County Coun. Kristine Olson, who lives about 20 minutes from the site and attended an open house on the project earlier this month.

“People are wary. They really want to feel like they have a full understanding . . . I’m going to continue to listen and learn, and ask questions.”

Such feelings are increasingly common among municipal leaders evaluating similar proposals as the province seeks to attract more than $100 billion of data centre investment by 2030 — but also face vocal opposition.

A number of data centre initiatives are early-stage proposals; others have been approved, including the $13-billion Meta data centre project being built in Sturgeon County.

“There’s a segment of the population that has questions and concerns about data development,” Alberta Technology Minister Nate Glubish said in an interview.

“I’m not surprised to see some municipal leaders who — they are bullish, but they’re cautious.”

The Boreal Technology Hub is being proposed by Brookfield and Canada Pension Plan Investment Board, which announced in February a memorandum of understanding with Calgary-based power generator TransAlta.

The three organizations agreed to examine the development of a large-scale AI-focused data centre hub at TransAlta’s Keephills power generation station site, about 60 kilometres west of Edmonton.

Parkland County Mayor Rod Shaigec said the land’s current zoning would enable a data centre development, but noted a project application has not been filed for necessary building permit applications.

He expects that could happen within a few months.

“With the province identifying that they want to be the pre-eminent (data centre) province in Canada, it concerns some residents, regarding things like electrical consumption and water — and that’s understandable,” Shaigec said.

“Some people are recognizing hey, there’s a need, there’s some value,” he added.

“Ultimately, when that application comes out . . . we’ll assess it and make a decision.”

More than 40 separate data centre project proposals have applied to the Alberta Electric System Operator (AESO) to connect to the grid, representing potentially 26 gigawatts of potential demand.

Premier Danielle Smith has recommended that developers bring their own generation or partner with a generating company for the electricity needed for new data centres.

Putting projects in the right place, having access to electricity and securing long-term customers will be critical for projects to advance, say industry experts.

“Everything we have seen here on the evolution of the data centre opportunity in Alberta has reinforced the importance of the site selection – and being able to secure local approval and demonstrate local benefit,” said analyst John Mould with TD Cowen.

The Boreal Technology Hub secured access to surplus electricity from the provincial grid that was made available by the Alberta Electric System Operator (AESO) in a process last year, as did the Meta development.

Boreal has an allocation for 230 megawatts (MW). It also has the potential to develop or secure its own power generation supply for future growth.

At full build-out, the hub is expected to provide up to 1,600 MW of capacity, ”supporting the growing demand for cloud computing, artificial intelligence and digital infrastructure,” states a project presentation.

“A lot the infrastructure is already built. But that being said, it doesn’t negate the impacts of the facility, the size, especially if they do build it up,” said Sarah Yurchevich of Alberta Data Centre Watch.

The project proponents note the hub will minimize its water use through a closed-loop cooling system, and also minimize noise and environmental effects.

“The Boreal site is very well-positioned for data centre development, with access to Alberta’s high-voltage transmission system, existing under-utilized power generation capacity and natural gas infrastructure,” Andrew Brent, spokesperson for project developer BGRE, said in a statement.

“The Boreal Technology Hub will provide significant financial benefits to Parkland County and the province of Alberta.”

Despite the economic benefits, public concern surrounding data centres has mounted across North America over the past year, including in Alberta.

In Calgary, councillors are grappling with a potential development in Ward 5, where a land-use redesignation has been proposed that could eventually allow for a data centre on the property.

Councillors Jennifer Wyness and Raj Dhaliwal want to see a temporary moratorium adopted on land use changes tied to large-scale data centre developments in Calgary. They want city administration to examine and report back on the risks, opportunities and potential environmental and economic effects.

“We’re trying to come up with a policy on large-scale data centres, given how resource intensive they are for both electricity and water,” said Wyness, who will propose a notice of motion to executive committee on the matter next month.

On Friday, the province indicated it will propose legislation in the fall sitting regarding data centre developments, to “reassure Albertans that we have heard their concerns,” and ensure power bills, grid stability and water supply won’t be affected, government house leader Joseph Schow told reporters.

In Calgary, Dhaliwal is encouraged by the province’s announcement, but wants to see the details.

“We do not have tools in our tool kit right now to evaluate these kind of projects,” said the Ward 5 councillor.

“Those tools need to be invented — and it takes time to invent them properly.”

Chris Varcoe is a Calgary Herald columnist.

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