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Experts warn Meta's Sturgeon County data centre could put pressure on Alberta energy prices, despite assurances from Meta and the provincial government that Albertans won't see higher bills.
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The future site of the Greenlight Electricity Centre in Sturgeon County, Alta. , which will power a new Meta AI data centre. It's well known that artificial intelligence data centres are huge consumers of electricity. But what's less clear is whether that could trickle down into higher energy costs for consumers in Alberta.
For the Meta Data Centre planned for Sturgeon County, Alta. — one of the largest proposed data centres in the province — the impact on household power bills could range from $270 to $460 per year once it begins operations, according to a recent report from clean-energy think-tank the Pembina Institute.
“The idea of hundreds of dollars per year on average over the coming years on bills is a pretty stark reminder of the impacts that these projects can have,” said David Pickup, the director of energy at the Pembina Institute. Data centres are physical facilities that house the computing hardware needed to store and distribute information for a variety of tech applications that use AI.
Data centres accounted for 4.4 per cent of U.S. electricity demand in 2023, according to the U.S. Department of Energy, which predicts this share could rise as high as 12 per cent by 2028. Meta Platforms Inc., the tech giant behind Facebook and Instagram, announced plans in July to build a $13-billion data centre complex, which is expected to be online in the next two to three years.
Meta to build $13B data centre near EdmontonTech giant Meta said Wednesday it plans to build a massive AI data centre in central Alberta, the company's first in Canada. Premier Danielle Smith joined other government and Meta officials to announce the 1-gigawatt data centre, which has drawn some concern about the amount of energy it will require.
It would be linked to an adjacent power plant, the $4.6-billion Greenlight Electricity Centre, which will produce 932 megawatts of power and have an ability to eventually double that. However, Meta has rights to connect to Alberta's grid ahead of Greenlight starting up, which is expected to happen in late 2030. The provincial government and Meta have said the Edmonton-area data centre will not make electricity more expensive for Albertans.
But the gap between the data centre opening and its power plant being built is one of the key factors that will put upward pressure on consumer electricity prices, according to the Pembina report and to experts who spoke to CBC. Pickup said that the impact on electricity prices would be highest during the years before the Greenlight plant comes online and would decrease once additional supply is available. The report estimates that period as 2027 and 2031.
Kent Fellows, an associate professor of economics at the University of Calgary, said that electricity prices could be affected by a project the size of Meta’s data centre if new generation does not come online at the same time.
“Something like a data centre that's using a lot of electricity, as much as a large town or even a small city, that's definitely going to move the needle if they don't have to bring their own generation with them,” Fellows said. Meta’s operations in the absence of its own power plant could mean higher wholesale electricity prices, Fellows said. In Alberta when wholesale electricity prices increase, retailers can adjust prices to cover their costs and margins.
“The biggest thing to think about here is just remembering that it is like any other market,” Fellows said. “There's a supply aspect and a demand aspect. ”Werner Antweiler, a professor at the University of British Columbia’s Sauder School of Business, noted that Meta could require nearly one gigawatt of electricity to run. That’s about 10 per cent of Alberta’s existing generating capacity.
In comparison, the city of Edmonton has a load of roughly 1.4 gigawatts, according to the Alberta Electric System Operator.
“That’s going to kill the supply cushion,” said Antweiler, referring to extra electricity that is available to the power grid to prevent blackouts if a power plant suddenly fails or demand spikes. “When you eliminate the supply cushion in the grid, then you’re driving up prices because you’re using these peak load plants more and more and more,” he said. Protest against the proposed Meta data centre in Sturgeon County Crowds gathered in Morinville, Alta.
, on Sunday to protest the proposed Meta data centre in Sturgeon County. Ben Baril organized last weekend's protest. Antweiler said the Pembina Institute’s estimate of a roughly 15 per cent increase in electricity prices is plausible.
However, there is significant uncertainty around “whether it's 10 per cent or 15 per cent or even 25 per cent," he added.
"These are all numbers that I cannot easily dismiss outright because that quite looks like it's consistent with where I see demand going. "The Alberta government is actively courting tech giants like Meta and Google to set up shop in the province. In late 2024, Technology and Innovation Minister Nate Glubish said Alberta hoped to have $100 billion in data centres under construction in five years.
The Pembina report, while being focused specifically on the Meta data centre, says there may be a piling-on effect.
“We anticipate similar, substantial, and long-term impacts as more data centres get built in Alberta,” it says. Pierre-Olivier Pineau, a professor and energy policy specialist at the business school HEC Montréal, said the potential impact would not be limited to Meta.
“When load is increasing, that means demand is increasing, so that creates a pressure on supply,” Pineau said. “When there’s more pressure on demand, prices rise because demand rises, and that’s how the market responds. ” Pickup said renewable energy, battery storage, and other technologies could help fill that gap, along with requirements that data centres reduce their electricity use during periods of high demand.
In a video posted to social media last month, Premier Danielle Smith said that if electricity supplies ever run tight, Albertans’ homes will be prioritized first, as the province’s grid emergency procedures put households and essential services ahead of industrial users.
“Policy is really the difference between significant impacts to consumers and potentially these projects being an asset to the grid and reducing costs. ” Pickup added that other forms of electricity such as solar or wind could be used to mitigate some of the timing and cost issues with getting a new gas plant running. By using gas power plants to provide electricity to the Meta data centre, Pickup said there could be more pressure put on natural gas prices.
With the likelihood of more data centres coming online, earlier this month the federal government has released new principles for responsible data centre development — including that data centres should not shift electricity costs to Canadians. The other principals say data centres should create lasting local benefits, minimize their environmental impact, be transparent about local impacts and bring strategic value to Canada.
In a statement to CBC, a Meta spokesperson said the report is based on hypotheticals and that they will fund new generation and grid infrastructure, which will reduce prices for Albertans. Premier Danielle Smith takes questions at virtual town hall on data centres in Alberta, NDP calls for pause “Meta pays the full cost of energy upgrades and electricity that our Sturgeon County data centre will use — those costs will not be passed on to Albertans — and we remain committed to matching 100 per cent of the facility's electricity use with clean and renewable energy,” said the statement.
A spokesperson for Alberta’s minister of affordability and utilities said in a statement to CBC that the Pembina Institute's analysis does not accurately reflect how Albertans pay for electricity, and that increased demand from data centres can attract new generation and lower power prices.
“Our government has ensured that every Albertan has guaranteed access to a rate which is fixed for two years, and increases are capped by regulation,” the statement read. Jessica Campbell is a reporter for CBC News, based in Lloydminster, Alta. She is a recent graduate of Carleton University’s bachelor of journalism program in Ottawa and has previously reported for the St. Albert Gazette. Feel free to send her your story ideas and news tips at jessica.campbell@cbc.ca.
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