CALGARY — TransAlta has won the right to tap into Alberta’s electrical grid to run a data centre, securing the last of a highly sought-after pool of power capacity the province has set aside to fuel its AI ambitions.

On Wednesday, the Alberta Electric System Operator (AESO), which operates the province’s power grid, allocated 230 megawatts of capacity to TransAlta’s Keephills project, a natural gas facility located 70 kilometres west of Edmonton. The decision means that TransAlta will be able to use a portion of the province’s available electricity at Keephills to power a data centre, the energy-hungry engines of “compute,” or computing power, that tech companies need to deliver their services.

Keephills is the second and final project to win a portion of AESO’s 1,200-megawatt allocation for “large-load” projects. AESO had already allocated the other 970 megawatts to a facility that would draw power from the Greenlight Electricity Centre, a proposed project near Edmonton that, as The Logic previously reported, could power a data centre for Meta. 

Alberta has ambitions to become a hub for AI data centres, with Premier Danielle Smith arguing that such developments could boost the province’s economic growth. However, Alberta currently lacks the electricity to power data centres on that scale. To address this, AESO in June temporarily capped additional “large-load” projects at a total of 1,200 megawatts to ensure that new AI data-centre developments don’t overburden Alberta’s grid. 

AESO’s final allocation means that the remaining data-centre proposals will need to build their projects entirely off-grid—without the provincial power grid as backup to their primary power supplies—until utility companies add new generating capacity. 

The province has received a flurry of data-centre proposals totalling 33 projects that would require more than 20,000 megawatts of power. That’s about equal to the current capacity of Alberta’s entire electricity grid, underscoring the immense power demands of the data centres that Meta, Google, Microsoft and other firms hope to build as they compete in the AI race that has consumed the global tech sector. 

TransAlta did not confirm who its data-centre partner is, saying only that it is “working closely with counterparties and progressing towards finalizing a memorandum of understanding” on Keephills.

In a conference call with analysts on Thursday, TransAlta CEO John Kousinioris said the company’s data-centre project “will contribute to powering a new industry in the province.” TransAlta acknowledged its interest in the 230-megawatt AESO allocation in its latest investor presentation, and also said it had rezoned 3,000 acres of land near its Keephills natural gas facility to accommodate a data centre.

The Keephills facility first came online in 1983, and now has 861 megawatts of capacity. The plant was the last of three Canadian facilities that TransAlta converted to natural generation in 2021 as part of its rapid shift away from coal.

If a hyperscaler eventually builds a data centre at the Keephills site, the 230-megawatt allocation would likely only account for a fraction of the power it would need. Consulting firm Bain expects global data-centre demand to be met largely by a relatively limited number of “campuses” with at least 1,000 megawatts of capacity.

A few days after The Logic reported that Meta was in talks with Calgary companies Pembina Pipeline and Kineticor to build a large-scale data centre, Pembina informed shareholders that its customer, which it did not name, had secured allocation from AESO. The companies involved in the proposal did not confirm The Logic’s reporting.

Pembina and Kineticor plan to build the Greenlight Electricity Centre in 450-megawatt increments, with plans to reach a final capacity of 1,800 megawatts.