Canada prepares for increased electric loads as country attracts data centers

Canadian provinces are increasingly attracting new data centers -- and their large power requirements -- according to Oct. 2 data from the Canada Energy Regulator, as the country seeks the best methods for handling the larger loads.

Currently the country has 239 operating data centers, the CER said. Ontario leads the country by far with 105 data centers, with Quebec, British Columbia and Alberta following at 57, 35 and 22 centers, respectively.

Data from Mordor Intelligence estimates that the current size of Canada’s data center market is 750 MW, projecting a 1.16 GW market size by 2029.

The energy regulator cited International Energy Agency data that showed data centers consumed 460 TWh in 2022 globally, which is equal to 71% of Canada’s electricity generation in a year. The IEA said its data center consumption estimates are expected to double by the end of 2026.

Canada is particularly attractive for data centers due to lower temperatures and low electricity costs, especially in provinces with abundant hydroelectricity like Quebec and British Columbia, the energy regulator said.

“The country’s clean energy grid, with over 80% of electricity coming from non-emitting sources, can also make it attractive for companies looking to build new data centers with a low carbon footprint,” the CER said.

Canadian utilities are having to factor data center electricity usage into their outlooks, including Hydro Quebec projecting an increase of 4.1 TWh of data center demand from 2023 to 2032. Ontario and Alberta electric system operators are considering outlooks with higher electricity demand driven largely by data centers.

A Sept. 26 report from the Business Renewables Centre-Canada said Alberta is seeing slowed power purchase agreements this year, tracking just one taking place in 2024. This slowdown in renewable PPAs makes the province less attractive to data centers, BRC-Canada says.

“The Alberta Electric System Operator (AESO) recently said it had at least six proposed applications for data centers in its application queue,” BRC-Canada said. “If they all went ahead, these facilities would require about 2,000 megawatts (MW) of electricity.”

The 2 GW could “most rapidly” be added to the grid with wind and solar projects rather than natural gas power plants, BRC-Canada added.

In response to the growth, data centers across the country are adapting heat recovery systems to improve energy efficiency, the CER said.

“At the QScale Q01 data center in Levis, Quebec, nearly 100 MW of energy from waste heat is expected to be redirected to households by the end of 2024,” the CER said.

The US Energy Information said in an Oct. 1 report that data center owners in the US are looking at nuclear energy as a compatible energy source. Two nuclear power purchase agreements in the US have been made specifically to provide electricity to data centers, the EIA said.

Data centers do not have fluctuating demand, which synergizes well with the consistency of nuclear power, the EIA said.

“Although historically costly to build, nuclear power plants typically generate power at relatively low operating costs, with a single reactor generally having a capacity of 800 MW or more,” the EIA said. “Nuclear power plants also produce electricity without directly emitting carbon dioxide, a consideration for technology firms investing in energy-intensive data centers that are trying to meet self-imposed emissions reduction goals.”