Alberta’s Data Centre Boom: What the TransAlta Partnership Signals for the Province’s Energy and Technology Future
Alberta is entering a new phase of economic development—one that blends its long-standing strength in energy production with the rapidly growing demand for digital infrastructure. A recently announced partnership involving TransAlta, the Canada Pension Plan Investment Board (CPP Investments), and Brookfield highlights how the province is positioning itself to become a significant destination for large-scale data centre development.
While Alberta has traditionally been known for oil, gas, and electricity generation, the next decade may see the province become an important hub for the computing power that drives artificial intelligence, cloud services, and global digital platforms.
The agreement between these organizations represents more than just another energy project. It signals a broader shift in how Alberta’s energy resources and infrastructure could support a rapidly expanding digital economy.
The Proposed Keephills Data Centre Project
TransAlta, one of Alberta’s major electricity producers, recently announced that it has entered into a memorandum of understanding with CPP Investments and Brookfield to explore the development of a large data centre facility west of Edmonton.
The proposed site would be located at TransAlta’s Keephills power generation facility, a plant that previously operated on coal but was converted to natural gas in 2021 as part of Alberta’s broader transition away from coal-fired electricity.
The preliminary agreement outlines a framework for supplying electricity to a data centre operation that could initially require approximately 230 megawatts of power. Over time, the project could potentially expand to as much as 1,000 megawatts, depending on demand and future development phases.
To put this into perspective, a facility drawing that level of electricity would rank among the largest energy consumers in the province.
The companies involved have indicated that further details will be shared once the partnership structure and investment commitments are finalized.
Why Data Centres Are Expanding So Rapidly
Data centres are specialized facilities that house large quantities of computer servers and networking equipment. These systems store, process, and transmit the enormous volumes of data required for modern digital services.
Everything from streaming video and cloud storage to financial transactions and artificial intelligence relies on these facilities.
In recent years, the global demand for computing capacity has accelerated dramatically. Several factors are driving this trend:
The growth of artificial intelligence and machine learning
Increased use of cloud computing by businesses
Expanding digital services and online platforms
Data storage requirements for large organizations
Companies such as Amazon, Microsoft, Google, and Meta operate enormous networks of these facilities worldwide. These organizations are often referred to as “hyperscalers” because of the massive scale of computing capacity they deploy.
However, hyperscale data centres require vast amounts of electricity to operate. In addition to powering servers, large amounts of energy are needed to cool the equipment and maintain stable operating conditions.
This demand for reliable and scalable electricity has created new opportunities for regions capable of supplying large, stable power loads.
Alberta’s Opportunity in the Data Centre Market
Recognizing the potential economic impact of this industry, the Alberta government has been actively working to attract large data centre investments.
Provincial leaders have suggested that the province could attract as much as $100 billion in data centre development by the end of the decade if the right conditions are created.
Several factors make Alberta an appealing location for these types of projects.
Abundant Energy Supply
Alberta has a well-developed electricity generation sector and access to large-scale natural gas resources. This makes it possible to supply the substantial power requirements of data centres.
Competitive Energy Prices
Compared with many jurisdictions, Alberta often offers competitive electricity prices due to its deregulated energy market.
Land Availability
Large data centre projects require substantial land areas for facilities, cooling systems, and electrical infrastructure. Alberta has significant land availability near existing power generation assets.
Cooler Climate
While not as cold as some northern regions, Alberta’s climate can still help reduce cooling costs for data centre operators.
Together, these factors create a compelling case for locating large digital infrastructure projects in the province.
Managing Demand on the Power Grid
While the economic opportunities are substantial, the rapid growth of energy-intensive facilities also presents challenges for Alberta’s electrical grid.
Data centres require continuous power with extremely high reliability. Sudden outages or voltage fluctuations can disrupt operations and damage sensitive equipment.
To maintain grid stability, Alberta’s electricity system operator has implemented limits on how much new large-load demand can connect to the system over the next several years.
Current plans allow approximately 1,200 megawatts of additional large-load projects to be connected to the grid by 2028. This cap represents only a fraction of the total power requests that developers have submitted.
The goal is to ensure that new industrial power demands do not compromise the reliability of the broader electricity system used by homes and businesses.
This constraint has encouraged energy producers to explore partnerships that integrate generation directly with major energy users, such as data centres.
Why the TransAlta Partnership Matters
The collaboration between TransAlta, CPP Investments, and Brookfield reflects a growing trend where power generation companies work directly with large energy consumers.
By locating a data centre near an existing power plant, developers can potentially secure reliable electricity without placing excessive strain on the broader grid.
The Keephills site is particularly well positioned for this type of arrangement because it already has major electrical infrastructure in place.
The plant’s conversion from coal to natural gas also aligns with broader environmental goals, as natural gas produces significantly fewer emissions than coal.
For investors such as CPP Investments and Brookfield, the project also represents an opportunity to participate in the rapidly expanding digital infrastructure sector.
Data centres have become an attractive asset class for institutional investors because they generate long-term, stable revenue streams through power purchase agreements and service contracts.
The Role of Institutional Investors
The involvement of CPP Investments and Brookfield highlights how large pension funds and infrastructure investors are increasingly moving into the technology infrastructure space.
Both organizations manage vast global portfolios and have been expanding their investments in renewable energy, digital infrastructure, and data storage facilities.
These types of investments typically involve:
Long-term capital commitments
Stable operating revenue
Strategic partnerships with infrastructure operators
By partnering with energy producers like TransAlta, institutional investors can help finance the development of large facilities while ensuring access to reliable electricity.
Alberta’s Energy Transition Continues
The Keephills project also reflects Alberta’s broader transition in electricity generation.
Over the past decade, the province has been gradually phasing out coal-fired power plants and replacing them with natural gas and renewable energy sources.
TransAlta’s conversion of the Keephills facility from coal to natural gas in 2021 was part of this transition.
Natural gas plants provide several advantages:
Lower emissions compared with coal
Faster ramp-up times to respond to demand
Greater flexibility in supporting renewable energy sources
As Alberta continues to modernize its electricity system, projects that combine energy production with digital infrastructure may become increasingly common.
The Growing Intersection of Energy and Technology
Historically, Alberta’s economy has been closely tied to resource extraction and energy production.
However, the emergence of data centres introduces a new intersection between the province’s traditional strengths and the global technology sector.
By leveraging its energy resources, Alberta has the potential to become an important location for the infrastructure that supports artificial intelligence, cloud computing, and digital platforms.
These facilities also generate economic benefits beyond electricity demand.
Data centre developments can create:
Construction jobs during development phases
Ongoing technical and operational positions
Demand for local services and infrastructure
Increased municipal tax revenue
In many cases, data centres also attract related technology companies that benefit from proximity to computing resources.
Looking Ahead
Although the Keephills data centre project is still in the early stages of development, it represents a significant step in Alberta’s effort to attract major technology infrastructure investments.
If finalized, the partnership between TransAlta, CPP Investments, and Brookfield could become a model for future collaborations between energy producers and digital infrastructure developers.
As artificial intelligence and digital services continue to expand globally, the demand for reliable computing power will only grow.
Regions capable of providing large, stable energy supplies—like Alberta—are well positioned to benefit from this trend.
For a province long known for its energy industry, the next chapter may involve powering not only homes and industries, but also the digital systems that underpin the modern world.
And if Alberta succeeds in attracting even a portion of the projected $100 billion in data centre investment, the province could emerge as a key player in the infrastructure supporting the global digital economy.
