Powering AI in Alberta: leveraging Affordable Natural Power Generation to become a North American Data Center Hub

The convergence of artificial intelligence (AI), cloud computing, and big data is triggering unprecedented demand for data centers in Alberta. These facilities require massive and continuous power primarily for compute-intensive tasks like ML model training and AI computing must be sited in regions that offer scalability, reliability, and speed to market.

Alberta, rich natural resources, is now emerging as a digital infrastructure potential hotspot. With vast natural gas reserves, a deregulated power market, and a commitment to innovation, Alberta is well-positioned to attract billions in data center investment. This white paper outlines the drivers behind this opportunity, showcases the Beacon AI Centers project as a case study, and argues why building data centers in Alberta is an economic and strategic imperative.

The AI Compute Power Demand and the Data Center Boom

The rise of generative AI, cloud applications, and autonomous technologies has pushed global compute power demand to historic levels:

  • AI / ChatGPT queries consume 10x the power of traditional search.

  • Global data center electricity demand is expected to double by 2030.

  • North American developers are pursuing dozens of gigawatts in new data center load, much of it tied to AI.

Alberta's Natural Gas Production: A Strategic Energy Asset for AI Infrastructure

Data centers are increasingly turning to natural gas-fired power generation to meet power demands, as grid capacity remains constrained across much of North America.

Key Advantages of Natural Gas in Alberta:

  • Readily available and affordable: Alberta has deep natural gas supply and well-developed midstream infrastructure.

  • Reliable and dispatchable: Natural gas can serve as baseload or peaking power—unlike intermittent renewables.

  • Scalable with CCS: Alberta is a leader in carbon capture and storage (CCS), allowing for cleaner long-term gas-fired power.

  • No new pipelines needed: Data centers co-located near gas fields can draw local supply directly, reducing infrastructure costs.

“Renewables alone cannot power a fraction of what we need… Natural gas is the only realistic near-term solution.”
 — Josh Scherzer, CEO, Beacon AI Centers

Case Study: Beacon AI Centers – $10 Billion Investment into Alberta

Beacon AI Centers, backed by private equity and led by a former Blackstone executive, is planning a $10B investment across six Alberta sites, totaling up to 4.5 GW of power demand equivalent to nearly half the province’s peak electricity load.

Beacon AI is working closely with AESO(Alberta’s electricity system operator to manage their power demand.

Grid Capacity considerations:

  • 4.5 gigawatts (equates to approx. 375 mmcfd of dry natural gas) of planned data center load is nearly half of Alberta’s current electricity consumption.  The data centers proposed could double Alberta’s electricity consumption and cause strain to existing power infrastructure.

  •  Sites in the Calgary and Edmonton regions.

  • Modular design (400 MW per site; one up to 1.8 GW).

  • Phased rollout beginning in late 2025, with first data center operations expected by 2027–2028.

  • Hybrid power strategy: grid draw in early years, transitioning to natural gas-fired self-generation by 2029.

  • Back-up generators will be used during peak summer demand. Exploring flexible load management options. Not all proposed data center projects will be realized.

  • Exploring options like grid connected natural gas generation with carbon capture sequestration.

Employment and Economic Impact:

  • 1,500+ construction jobs per site over 2–3 years.

  • 200–300 permanent jobs per site (engineering, operations, IT support).

  • Multiplier effect from AI firms and startups co-locating near compute infrastructure.

  • Creates new demand for natural gas

  • Eliminates the need for additional pipeline infrastructure

  • Increased drilling activity

  • Additional royalties and tax revenue for the province

“Once the data centers are here, the tech companies follow. Alberta becomes an AI hub, not just a site.”
 — Josh Scherzer

Economic and Strategic Benefits for Alberta

Mark Carney’s visit to Western Canada and Premier’s meeting in Saskatchewan proposed the following changes:

  • Creating a list of “nation-building” projects

  • Implementing a faster approval process and less bureaucracy

  • Adjusting and relaxing regulatory requirements for projects deemed to be of national interest

In the current economic environment and recently announced proposed government policies, building and hosting data centers offers Alberta a transformative opportunity in the following ways:

a. Diversified Demand for Natural Gas

  • A full buildout of 12 GW of data centers would require ~1 Bcf/day of gas.

  • This demand supports drilling, service companies, royalty revenues, and tax flows—without requiring costly new export pipelines.

b. High-Value Job Creation

  • Thousands of construction jobs and hundreds of permanent technical roles.

  • Stimulates growth of adjacent AI sectors, from robotics to autonomous vehicles.

c. Modern Industrial Base

  • Attracts global companies who need capacity (e.g., Amazon, Microsoft, Google).

  • Promotes Alberta as a digital economy leader, not just a resource economy.

d. Technology Infrastructure as Sovereign Capability

  • Enhances Alberta and Canada’s ability to host critical compute infrastructure domestically.

  • Reduces reliance on US infrastructure and positions Alberta for global tech investment.

Policy Priorities and Recommendations

To support and accelerate this economic opportunity, Alberta and Canadian policymakers should:

  • Improve Grid Capacity Access

Fast-track short-term grid allocations to AI tenants.

  • Support for Self-Power Generation

Enable natural gas generation approvals and equipment procurement.

  • Encourage Carbon Capture Investment

Expand CCS incentives for data center self-power generation

  • Cooling and Water Efficiency Support

Encourage liquid/air hybrid cooling and greywater reuse.

  • Incentives for Co-location

Promote clustering of AI startups and advanced manufacturing near compute zones.

  • Protect National Security

Protecting and enhancing national security

Conclusion

Alberta’s abundant natural gas, forward-looking energy market, and growing ecosystem of AI infrastructure firms make it one of the most promising data center locations in North America.

Strategic support from industry and government can ensure that Alberta becomes not just a place where data centers are built but the home of the next generation of AI development, clean energy innovation, and digital economic growth.

References: 

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This whitepaper is a free publication by Sulpetro Inc.

Sulpetro Inc. is a boutique energy industry market research firm producing NGL-LPG supply schedules and statistical data publications from their proprietary gas-liquids. The firm has been operating since 1983, and their publications have been produced for the oil and gas sector for more than 40 years. 

Charlotte Kingsford