New $750M data centre to be built in Calgary area, the largest in Alberta

October 30, 2024

Data centres have become a topic of intense interest in Alberta and around the world because of the boom in generative AI and the intense electricity requirements of the sector

By Chris Varcoe – Calgary Herald

Alberta has made a giant push to attract billions of dollars of data centres to the province, and it’s about to land a major new project.

Montreal-based eStruxture Data Centers, the largest data centre provider in the country, will announce Tuesday it’s building a new $750-million facility, located five kilometres north of Calgary in Rocky View County.

The development, designed to deliver 90 megawatts of power contracted from the Alberta grid, is the company’s third such centre in the Calgary area.

It will also be the largest of the company’s 16 facilities across Canada – and is billed as the largest in the province.

With the sudden growth of AI and continued expansion in cloud computing, the company’s CEO believes Alberta is well positioned to become home to more centres in the coming years due, in part, to available land and electricity, skilled workers and the province’s interest in hosting such facilities.

“We describe this as a hyper-scale, AI-focused data centre,” Todd Coleman, founder and CEO of eStruxture, said in an interview.

“We see Calgary as absolutely one of the key linchpins to Canada’s foray in driving AI demand north of the border. We believe that the ultimate ecosystem of AI is going to find its way into Alberta in a rather significant way.”

The company, founded in 2017, is working on the new project’s design and construction will start imminently. The development is expected to be operating by the end of 2026.

“Given the 24-month build cycle, we wanted everything lined up to give our customers the assurance that we have the power, we have the land. We’re going full tilt on the build,” he said.

In 2022, the company built its second facility in Alberta in Balzac, having previously acquired its first centre in the region.

Through its existing centres in Montreal, Vancouver, Toronto and Calgary, eStruxture currently serves close to 1,000 clients and has plans to keep growing.

“We expect to place significant investment into Alberta over the next five to 10 years,” Coleman added.
Data centres have become a topic of intense interest in Alberta and around the world because of the boom in generative AI and the intense electricity requirements of the sector, particularly from large tech giants such as Microsoft and Google.

The average ChatGPT query consumes about 10 times the power of a standard Google search. By 2030, the development of AI is expected to lead to a 160 per cent jump in global data centre electricity use, according to Goldman Sachs Research.

Large amounts of electricity are needed for data centres for computing and cooling systems.

Earlier this month, the Canada Energy Regulator reported 239 data centres are operating in the country, including nine around Edmonton and 12 in Calgary. (This includes Amazon Web Services, which announced in 2021 that it would establish a new cloud computing hub in the region.)

The provincial government also sees data centres as a way to attract significant investment, create high-tech jobs and spur demand for Alberta natural gas to power electricity generation.

“This is easily another $75-billion to $100-billion opportunity,” Invest Alberta CEO Rick Christiaanse said in an interview this summer.

Coleman believes the data centre sector is becoming “much more location agnostic” than in the past.
The Canadian company examines several key factors when considering where to place its new developments, such as the availability of electricity, fibre-optic links, and proximity to larger cities with a skilled workforce.

At peak construction, the new project near Calgary will employ around 250 people, and around 45 to 50 permanent technology-driven operating jobs. Clients that use the centres and other services will employ more people, he noted.

The building shell for the new modular development will be about 150,000 square feet, but the company expects the campus could grow to include two buildings.

The province is expected to have surplus power for the next few years because several gas-fired power projects are coming online this year, along with more renewable projects.
Alberta has huge supplies of natural gas that can be tapped to generate baseload electricity, but gas-fired units generate emissions.

“Having some data centres come into the marketplace will help fuel other investments, in terms of AI robotics, or AI in financial investment,” Alberta Utilities Minister Nathan Neudorf said in a recent interview.
“We are one of the only jurisdictions in Canada that can actually grow generation to meet that need — that’s why there’s so many talking to us.”

Many tech companies have net-zero plans, and the ability to decarbonize — such as using carbon capture and storage with natural gas-fired facilities — is important for data centres in the medium and longer-term.

Customers have immediate needs to build and operate data centres quickly, but will also want to see plans to lower emissions.

“Everyone is working on their ESG commitments, and those are super important, but they’re balancing their ESG commitments . . . with their needs of their underlying business that are immediate,” Coleman said.

In June, Fengate Asset Management of Toronto announced it led a $1.8-billion investment into eStruxture — becoming the majority owner — which will allow the company to accelerate its expansion plans.

More companies are looking at Alberta as a potential place to build data centres, with relatively cheap power, but the ability to get permits quickly and build is also important as AI development grows, said analyst Carson Kearl of energy analytics firm Enverus.

“Calgary is developing as a tech hub in Western Canada, which also supports that growth from the data centre perspective,” he said.

“We are in a pretty good spot, as long as the power can show up.”