As Canada positions itself at the forefront of the digital age, embracing artificial intelligence (AI) across various sectors, a critical challenge emerges—balancing rapid technological advancement with sustainable energy consumption. The rise of AI data centres, essential for processing vast amounts of data required for innovations in machine learning, healthcare, finance, and more, has spotlighted the urgent need for a sustainable approach to energy infrastructure. Renewable energy stands as a beacon of hope in this scenario, offering solutions that not only address environmental concerns but also bolster economic growth and technological competitiveness on a global scale.
The Problem
The surging demand for AI technologies is expected to have significant impacts on Canada's energy grid, particularly concerning energy consumption and potential strain on the grid's infrastructure. Although AI holds the potential to transform the energy sector by optimizing energy generation, distribution, and consumption, its implementation also raises concerns regarding energy usage and carbon emissions. AI requires substantial amounts of energy, with a single AI search query consuming 10 times the energy of a Google search. According to the International Energy Agency (IEA), the energy usage from data centres powering AI is projected to double by 2026, resulting in an AI energy demand exceeding 1,000TWh – roughly equivalent to Japan's electricity consumption. This increased energy demand could strain the grid, especially during peak periods.
The repercussions of AI's extensive energy demands are clearly visible in its impact on power systems, presenting a significant concern in Canada as well. In regions like Ontario and Quebec, where technological industries are booming, utility companies may soon face similar challenges as those seen in the United States. These provinces could find themselves at a crossroads, needing to postpone phasing out fossil fuels or limiting new connections to manage the increased load from data centres. This situation highlights a critical paradox: while AI has the potential to streamline energy usage and cut emissions theoretically, its current operational scale might contribute further to the environmental issues it seeks to mitigate by increasing dependence on carbon-heavy electricity sources and adding strain to already stretched electrical grids.
The Rise of AI Data Centres
According to a CBRE report on North America Data centres Trends for H1 2023, there is significant construction activity and interest in expanding data centres infrastructure across North America due to high demand and developer appetite. The report notes that an all-time high of 2,287.6 MW was under construction in primary markets as of early 2023, with strong preleasing activities indicating robust future growth.
The Demand Surge: What’s Fueling It?
At the heart of this rapid expansion lies an undeniable force: AI's insatiable hunger for computational power. As tech giants rush to harness the capabilities of machine learning and other advanced technologies, their infrastructures require enormous amounts of electricity to keep up with demand. The preleasing activities highlighted in CBRE’s report suggest that developers are already anticipating future growth—the kind of exponential growth that could reshape entire sectors and economies.
But while the technological advancements driving this boom are exciting, they also come with an alarming caveat: energy consumption on a mass scale.
Renewable Energy: Canada’s Silver Bullet?
Canada has emerged as a beacon of hope in addressing these concerns by leveraging its natural resources for sustainable solutions. Provinces like British Columbia and Quebec are leading the charge with their abundant hydroelectric power supplies, offering data centres access to clean, renewable energy sources. Over 80% of Canada’s electricity is derived from non-emitting sources, making it one of the most attractive destinations globally for companies seeking low-carbon options for their massive digital operations.
However, all may not be as rosy as it seems. Alberta—a province that has seen a significant upswing in renewable energy projects over recent years—appears to be hitting some turbulence. Wind and solar projects still have the potential to add around 2,000 MW into Alberta’s grid, according to Business Renewables Centre-Canada (BRC), but signs suggest momentum could be slowing down just when it's needed most.
Are we witnessing another case where optimism about renewable energy outpaces reality? And if so, what will it mean for Canada’s ambitious plans to lead the green data centres revolution?
Nuclear Power: The Dark Horse
An often-overlooked player in this high-stakes game is nuclear power—an option increasingly being discussed by data centres operators due to its ability to provide large amounts of stable, carbon-free electricity. While no specific agreements involving nuclear-powered data centres have been inked in Canada yet, there is growing interest within both government circles and private enterprise regarding its potential synergy with AI-driven infrastructure.
Nuclear power offers something few other sources can match—a steady stream of reliable energy perfectly suited to meet the around-the-clock needs of massive server farms powering everything from streaming services to autonomous machines learning on vast datasets.
Could nuclear become Canada’s next big bet? It certainly seems positioned well if Alberta's recent moves are any indication; officials there have assembled a special working group dedicated solely toward attracting large-scale tech investments—including those from companies eyeing nuclear-backed facilities.
The Road Ahead
As more megawatts come online across North America—and especially within Canadian borders—it’s clear that choices must be made about how these immense new demands will be met without devastating environmental consequences. Will provinces like Alberta succeed in reinvigorating their renewable initiatives before reaching critical tipping points? Or will nuclear emerge as Canada's ace-in-the-hole solution?
The rise of AI data centres represents both opportunity and peril—a chance for innovation paired with profound ecological stakes at play beneath every kilowatt-hour consumed or saved through careful planning today.
Only time will tell whether we’re building toward sustainability or simply accelerating our march into an unsustainable future powered by unchecked digital ambitions.
