Capital Power still waiting for Alberta data centre powering opportunity

Energy company Capital Power Corp. says it’s holding out for an opportunity to power a large-scale data centre at its Genesee Generating Station, but Alberta’s grid operator is not currently making enough electrical connection capacity available for the size of project it’s chasing.

The power plant southwest of Edmonton now runs entirely on natural gas instead of coal after a $1.6-billion multi-year revamp, allowing it to boost its capacity by around 60 per cent while cutting greenhouse gas emissions by 40 per cent.

Capital Power chief executive Avik Dey has said it would be the perfect site to exclusively power a data centre. Those are huge facilities housing the computing firepower needed for artificial intelligence and other applications. It can take an enormous amount of power to run and cool them.

The Alberta government has set a goal of attracting $100 billion in data centre investments over five years.

The Alberta Electric System Operator said last month it has received requests from 29 proposed data centre projects representing more than 16,000 megawatts — more than 11 times the City of Edmonton’s load.

To accommodate that surge in demand, the AESO has placed a temporary limit on the projects wanting to connect to the grid — 1,200 megawatts between now and 2028 — in order to ensure system reliability.

Capital Power was among those raising concerns about the interim limit.

Dey told analysts on a conference call Wednesday that it wants to pursue a 1,000-megawatt project, but doesn’t see something that big moving forward with a potential partner under the grid operator’s current Phase 1 limits. It’s taking a pass on pursuing something smaller at Genesee in the meantime.

“Our physical site at Genesee is incredibly advantaged for a large hyper data centre,” he said, pointing to its access to fibre, transmission and distribution infrastructure.

Dey said Capital Power will look at whether it can move a project ahead under future phases of the AESO’s allocation plan, and continue to advocate for the current limit to be raised.

“I think we all want the same thing here … We have a different view on how that should be allocated, but I think everyone’s trying to work to the same endgame here,” he said.

“And I will concede the AESO and the utilities ministry and the government are balancing multiple needs and considerations.”

Capital Power shares dropped almost six per cent in afternoon trading on the TSX to $58.55.

Earlier Wednesday, the power producer said it swung to a loss in the second quarter compared with a profit last year.

It said its net loss attributable to shareholders was $132 million during the quarter ended June 30, or 92 cents per diluted share.

That compared with a profit of $75 million, or 51 cents per share in the same quarter last year.

The loss came as revenue also dropped to $441 million, down from $774 million last year.

In the quarter, the company completed its $3 billion acquisition of two power facilities in the U.S. that it says add to its flexible power generation.

The company also revised its guidance for the year, raising its expected capital expenditures, adjusted earnings before certain deductions and adjusted funds from operations.

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