Artificial intelligence data centers are known for their high electricity consumption, which can potentially lead to increased energy costs for Alberta consumers. The proposed Meta Data Centre in Sturgeon County, Alberta, one of the largest in the province, could result in an annual increase of $270 to $460 on household power bills once operational, according to a recent report by the Pembina Institute, a clean-energy think tank.
These data centers house the computing hardware required for various tech applications utilizing AI and accounted for 4.4% of U.S. electricity demand in 2023. Meta Platforms Inc., the company behind Facebook and Instagram, has announced plans to construct a $13 billion data center complex in the area, expected to be operational within the next two to three years.
The data center will be connected to the Greenlight Electricity Centre, a $4.6 billion power plant generating 932 megawatts of power, with the potential to double that capacity in the future. Although Meta has the right to connect to Alberta’s grid before Greenlight’s completion, scheduled for late 2030, both the provincial government and Meta have assured that the data center will not escalate electricity prices for Albertans.
However, the time gap between the data center opening and the power plant’s construction is a key factor that could push consumer electricity prices higher, as indicated by the Pembina report and experts interviewed by CBC. The report suggests that the period between 2027 and 2031 will see the most significant impact on electricity prices before the Greenlight plant comes online.
Experts like Kent Fellows, an economics professor at the University of Calgary, warn that the data center’s substantial electricity usage could affect prices if new generation capacity does not coincide with the center’s operations. This imbalance could lead to higher wholesale electricity prices, impacting consumers in Alberta.
The potential strain on electricity supply is a concern, with Meta’s projected one gigawatt demand representing approximately 10% of Alberta’s current generating capacity. This could eliminate the supply cushion in the grid, increasing reliance on peak load plants and potentially driving up prices further.
Despite assurances from Meta and the government, there are concerns about the cumulative effect of multiple data centers in the province. Pierre-Olivier Pineau, an energy policy specialist, emphasized that increased demand from data centers can strain supply, leading to price hikes in the electricity market.
To mitigate these challenges, renewable energy sources, battery storage, and energy-saving technologies could play a crucial role. The government’s commitment to prioritize households in case of tight electricity supply situations aims to alleviate concerns about potential price increases for consumers.
As more data centers come online, responsible development principles are being emphasized, with a focus on ensuring lasting local benefits, minimal environmental impact, transparency, and strategic value to Canada. Meta’s commitment to funding new generation and grid infrastructure, along with clean energy initiatives, aims to ease the burden on consumers and support sustainable energy practices in Alberta.