Alberta Grid Braces for 1,200 MW of New "Large Loads"

The Alberta Electric System Operator (AESO) has announced that the current power grid can accommodate up to 1,200 MW of new large-load projects, such as data centers, between now and 2028. This development is expected to soak up the current supply surplus, leading to a recent spike in forward electricity prices for 2027 and beyond. 8760 is closely monitoring these announcements as they will be a key issue for the market in the coming months.

The increasing emergence over the last few years of artificial intelligence and cloud computing, and the electricity that this technology requires from both a generation and a grid/wires capacity perspective, has created both significant opportunities and challenges for the world-wide electricity industry.

There is a large race to “host” such projects, given the investment spend on them and the resulting tax base is in the multi-billions of dollars. Alberta is generally seen as a potential attractive location for such projects,

due to its de-regulated electricity market, its abundant supply of natural gas to fuel reliable base load natural gas-fired generation the technology needs, its cooler climate which reduces cooling demands on computer equipment, land availability and its good fibre network connectivity. Smaller projects could be grid- connected, although a more feasible solution is for larger projects to “bring their own generation” – building large gas-fired generation “behind the fence” to directly service the data centres. This is the same generalidea as many co-generation plants that are mostly if not fully dedicated to service oil sands loads in Northern Alberta.

The Alberta Electric System Operator (“AESO”, or the power pool) currently has approximately 16,000 MW of large load/data centre type projects at various stages in its connection application queue. For context, Alberta’s average load is around 10,000 MW (peak load around 12,000 MW), and the City of Edmonton’s average load is around 1,400 MW. The size/scale of the potential is significant relative to the current market. The connection queue has been well known – but was somewhat under the radar given the challenges in serving these large loads.

On June 4, 2025, the AESO somewhat shocked the industry, and advised that the current grid can accommodate up to 1,200 MW of such “large loads” between now and 2028, based on current/forecast supply and demand and transmission capacity, without impacting system reliability. It advised it would enter into discussions with project proponents of the most advanced/likely projects in the queue, to contractually allocate the available transmission capacity.

This announcement caused an immediate spike in forward prices for 2027 and subsequent, as per the graph below. In particular, forward prices for 2028 and 2029 have increased approximately $10/MWh (or $0.01/kWh) from pre announcement to time of writing this update in early September.The increase in forward prices just reflects likelihood of at least 1,200 MW of projects proceeding, with approximately a two-year construction horizon. Such projects would substantially if not fully “soak up” the current supply surplus.

The market/strategy questions at this time are: Will these 1,200 MW of projects proceed? If yes, who and when? Will prices adjust even more? If not, what will prices do? Announcements on specific projects are expected at any time.