ai sector sees trade-off in b.c. energy policy that puts them in back seat for new power
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inside of power-hungry data centre.
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ovhcloud/afp via getty images
b.c.’s new energy policy leaves the province’s rapidly growing artificial-intelligence sector essentially fighting for scraps when it comes to electricity to power its data centres, observers say.
the policy promises to allocate 300 megawatts of electricity for ai data applications and 100 megawatts for other data centres that will be awarded on a competitive basis. new cryptocurrency operations, however, will be barred from the grid.
people in the industry see an uncomfortable trade-off in the terms of the policy change, which defines a place, although a limited one, for ai on b.c. hydro’s grid.
provincial energy minister adrian dix was upfront about the need to “prioritize vital growth in sectors like mining, natural gas and lowest-emission lng” for the projects in natural resources that can deliver when it comes to allocating electricity.
on monday, dix announced the province will set aside a fraction of any new electricity that becomes available for ai and open it up in a competitive process outside of the “first-come, first-served” policy that b.c. hydro maintains for large industrial users.
“the positive side is that there’s a recognition of ai data centres in the policy,” said rob goehring, executive-director of ainbc, the key industry group representing canada’s third-largest hub for ai-related companies.
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the 300-megawatt commitment to ai looks small compared with ai companies such as openai, which alone is planning to build up to 10 gigawatts worth of data-centre projects in the u.s.
the limit in b.c. is also coming at the same time the federal government is putting a premium on building canada’s ai infrastructure as “one of the key engines of progress,” according to ottawa’s new minister for ai and digital innovation, evan solomon.
during an ai conference in september, solomon referred to it as “digital sovereignty” — canada owning the “tools and the rules” for a domestic ai industry.
at the same conference, solomon said ottawa will do its part to pave the way for investments in domestic computing power for ai. goehring said ainbc will probably have more of a position on the topic once it sees is in the federal budget on tuesday.
goehring said the ai sector understands the need to set priorities for critical minerals, but “one of the silver-lining things out of this could be that at least having some allocations makes it clearer on how business can be done (in b.c.).”
university of b.c. economist werner antweiler said it makes sense for the province to prioritize allocations for new power to users that create the best economic gain for the province.
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in that sense, looking at ai data centres “are not particularly attractive with respect to generating economic activity,” said antweiler, chair of the strategy and business economics division at ubc’s sauder school of business.
in an interview monday, dix said the policy is attempting to create some clarity for the ai sector at the same time that there is “significant demand, exponential demand, for it everywhere.”
“we’ll be going through a formal and competitive process based on criteria set by the cabinet,” dix said. “and saying clearly what will be available, when it will be available, and that we create jobs to the benefit of b.c.”
he added that the policy is the result of “lessons learned” from other jurisdictions around north america where new demands have sent electricity rates soaring.
alberta, for instance, has launched a strategy to make itself the most attractive jurisdiction to build data centres. as of october, it had received 33 inquiries for projects with electricity demands almost twice the entire province’s existing peak power load.
dix said the allocations announced oct. 20 with the government’s policy statement are just a starting point. the intention is to renew the allocation every two years as the electricity becomes available, and “that’s a lot of power.”
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dix said b.c. hydro has received several requests for 1,400 megawatts of power for ai and data uses, outside of projects already on the books.
he added that the b.c. policy favours industries that provide more jobs, more royalty revenue for the province, and bigger economic benefits — which means mining and lng.
the electrification of mining helps avoid carbon-dioxide emissions from their operations, and “the electrification of those industries is to the broader benefit of b.c.”
limiting the amount of electricity available for ai might put a damper on investment in b.c., but if it weeds out companies “just trying to capitalize on the gold rush,” it’s not a bad thing, according to dugan o’neil, vice-president of research and innovation at simon fraser university.
in the research community, sfu recently opened its own data project, its fir supercomputer at its burnaby campus, which is now canada’s most powerful academic super computer. the $80 million project was backed by the digital research alliance of canada, the province and other partners.
“i think b.c. is a very desirable place to do this because we have a large capacity of sustainable electricity,” o’neil said. “so i think that people, companies, that care about either providing sovereign access to canadians, or care about their carbon footprint, will want to put their data centres in b.c.”
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