Alberta’s AI data centre boom unleashes ‘gold rush’ for electricity allotments

Last year, as AI data centre proponents competed for a portion of the limited 1,200 megawatts that would connect their projects to the provincial grid, one company secured 180 megawatts from the Alberta Electric System Operator (AESO) — then sold it to a buyer for $18 million.

Industry experts say it’s a result of the rapid push to build out AI data centres and power those energy-hungry facilities, with immense demand sparking a “gold rush” for electricity connections.

In November, Kalina Distributed Power, a Canadian subsidiary of Australian power company Kalina Power Ltd., announced it sold and transferred its 180-megawatt allocation to Greenlight Electricity Centre Limited “and its customer (a global data center developer and user).”

Greenlight is a joint venture between Pembina Pipeline and Kineticor planned for development northeast of Edmonton. Once complete, it will ultimately provide around 1,800 megawatts of power capacity.

Just days after the $18 million sale and megawatt transfer was completed, AESO announced it had allocated the 1,200 megawatts to two projects, one of which was allotted 970 megawatts — a project from Pembina Pipeline that could become a massive Meta AI data centre, according to The Logic.

Pung Toy, CEO and co-founder of Power Grid Specialists Corp., said in this new era of AI demand there’s a “gold rush” for electricity allotments to build out more data centres, leading to a unique sale such as this one.

“It’s unprecedented in any space, but since transmission capacity seems to be a commodity now — before it never used to be,” said Toy, who has helped oil and gas companies connect to the grid in his decades-long career. Now, he’s also working with AI data centre developers.

“The majority of the time when oil and gas companies [wanted] to connect, there was never a rush. You file your application with the AESO, you go through the studies and whatever they needed … if the study shows no concerns, they were granted that interconnection,” he said.

The demand for connection to the grid now is unprecedented. Currently, there are 42 large-load projects in AESO’s queue, requesting a total load of 21.1 gigawatts from the grid. 

For comparison, that’s nearly twice as much as the province’s entire power load during peak hours, or 15 times the electricity it takes to power Edmonton.

“I understand why the AESO is going through this allotment phase just to make sure the system doesn’t get overwhelmed. Normally oil and gas developments take a period of time. There’s not really a gold rush because these types of infrastructure [are] you know, $1-billion, $2-billion-type decisions, so they go through very, very methodically,” Toy explained.

“Whereas the AI centre space you can plug in a data centre within three years, it doesn’t take much to install these types of facilities.”

Developers that had already qualified for Phase 1 of AESO’s program were allowed to transfer their allotments amongst each other between June 30, 2025 and July 7, 2025. 

In that period, Kalina reported it received 180 megawatts for its large load projects, representing 15 per cent of the total 1,200 megawatts up for grabs. In its quarterly report, Kalina said its allotment was “disproportionately larger than others because its applications for load were integrated with applications for generation as well.”

While Kalina Power did not respond to CBC’s request for comment, in October, the company held a webinar in which it addressed the 180-megawatt sale.

“Clearly, these funds are utterly transformative of our cash position and balance sheet,” said Timothy Horgan, Kalina Power Limited’s executive director. 

“The change is from a company under pressure to make a deal to one that can confidently pursue the range of transactions, investments, and sales that will allow us to develop these projects and our portfolio in the way most accretive to all of our shareholders.”

Ross MacLachlan, Kalina’s managing director and CEO, said another colleague on the call would help the webinar audience understand: “What did we give away? Which is basically nothing … in return for something, which is fantastic.”

AESO confirmed to CBC News that developers did not have to pay a fee to qualify for an electricity allotment in Phase 1 of its Large Load Integration program. 

Developers only needed to present a letter of support from the municipality or county it planned to build its facility in, complete power flow studies and provide a provision of security for financial obligations that would be incurred if it was successful in securing a load contract.

Matthew Jenkins, executive director of Kalina’s Canadian subsidiary, said of the sale to Greenlight’s customer, “We believed it was really important to attract a major hyperscaler there, which is why we made the critical strategic decision to actually transfer those megawatts … at the end of the day that 180 megawatts wasn’t going to be of use to us.”

Kalina has five projects in the works in Alberta which would power up to 1,700 megawatts of data centre activity. None of those power projects require access to the provincial grid until 2029-2030, according to its June 2025 quarterly report.

Kineticor declined to comment on the sale. Pembina Pipeline and Meta did not respond to CBC’s request for comment.

Sam Jenkins, managing partner at Punchcard Systems, an Edmonton-based technology consulting and development firm, said that by AESO introducing the temporary cap on data centre connections — to ensure grid reliability — it created a limited pool of connection capacity.

“When there’s resource scarcity, the market typically reacts to that in its own curious ways.”

Jenkins added that “from a digital economy perspective, what we’re seeing is a bit of a bottleneck as it relates to infrastructure. And we’ve seen those bottlenecks in other parts of the data centre ecosystem,” like chip production.

“AI growth is really no longer just constrained by the real estate where we’re going to build or the chips … It really is being constrained by how fast you can secure dependable, reliable power sources for interconnection.”

As for the long-speculated AI bubble burst, Toy said even if the promise of AI expansion ceases to be, those electricity allotments for data centres will still hold value.

“AI centres are the flavour of the day, but everything comes into balance. If the AI centres don’t materialize, guess what? That capacity will be put up for sale and some oil and gas company may snatch it up,” Toy said.

“To me, now it’s a commodity. Kalina has shown it’s a commodity.”