Artificial intelligence data centers are known for their high energy consumption, which may lead to increased energy costs for Alberta consumers. The proposed Meta Data Centre in Sturgeon County, Alta., could potentially raise household power bills by $270 to $460 annually once operational, as per a recent report from the Pembina Institute, a clean-energy think tank.
These data centers house the necessary computing hardware for various AI applications, contributing to 4.4% of U.S. electricity demand in 2023, with projections indicating a potential increase to 12% by 2028. Meta Platforms Inc., the company behind Facebook and Instagram, has announced plans to construct a $13 billion data center complex near Edmonton, expected to be operational within the next two to three years.
The data center will be connected to the Greenlight Electricity Centre, a nearby power plant producing 932 megawatts of power, with the capacity to double in the future. Despite assurances from the provincial government and Meta that the data center will not elevate electricity prices for Albertans, experts suggest that the gap between the data center’s launch and the power plant’s construction could exert upward pressure on consumer electricity rates.
According to the Pembina report, the period between 2027 and 2031, before the Greenlight plant comes online, will likely witness the highest impact on electricity prices, which could normalize once additional supply becomes available. Experts emphasize the importance of timely additional generation to counteract the potential price effects of large-scale projects like Meta’s data center.
The significant electricity demand of nearly one gigawatt posed by Meta’s operations could strain Alberta’s existing generating capacity and eliminate the supply cushion in the grid, potentially leading to increased prices and reliance on peak load plants. Efforts to incorporate renewable energy sources, battery storage, and electricity use management during peak demand periods may help mitigate these challenges.
With more data centers expected to enter operation, the federal government has introduced principles for responsible data center development, emphasizing considerations such as lasting local benefits, minimal environmental impact, transparency about local effects, and strategic value to Canada. As Meta and other organizations commit to these principles, they aim to invest in new generation and grid infrastructure to alleviate potential price impacts on consumers.
