Blaming Data Centres, Alberta Electricity Industry Expects Tripling of Power Prices ⇥ nationalobserver.com

If you believe Meta, its forthcoming Albertan data centre will be, at worst, unnoticeable to people across this province:

We pay the full costs of our data centers’ energy use so consumers aren’t negatively impacted, and fund new and upgraded infrastructure. We worked closely with Greenlight Limited Partnership, Altalink, Capitol Power, and the Alberta Electric System Operator to plan for and meet our energy needs years in advance of this data center coming online.

Sure sounds like the commitments of a stand-up corporate citizen. However, if you listen to the power companies, they tell a somewhat different story.

Rory White, the National Observer:

In its latest earnings call, [Capital Power’s] CEO Avik Dey predicted a “return to higher pricing” telling analysts that he couldn’t rule out prices of “$80 or $90” per megawatt hour of electricity by early 2028. By 2029, rival company TransAlta is predicting an average of $100 — more than triple the average price this year — a high not seen since the province’s 2021-2023 energy crisis.

Driving this increase is the province’s reliance on natural gas power, which cannot be built fast enough to accommodate data centre demand, according to Will Noel, a senior electricity analyst at the Pembina Institute. “In Canada and internationally, we’re seeing this huge crunch in gas turbine supply shortages,” he said. The province has also backed itself into a corner in terms of its options for alternatives. “Alberta has over the past couple of years really stifled the growth in its wind and solar.”

White reports this would increase the electricity costs to a typical household by “hundreds of dollars more per year”. However, as White caveats, these prices have precedent as recently as three years ago — and that undersells it. In 2022, electricity costs were as much as five times above current rates. Even without adjusting for inflation, we are currently paying less than we did from 2018–2020, and a tripling of the current rate would have a nominal cost similar to that of 2008. That is not to say this is good, but I think it is worthwhile seeing the “tripling” figure within the context of recent fluctuations.