In this article:
- What is Alberta’s new Data Centre Regulation
- What Alberta’s “Bring Your Own Power” (BYOP) approach means for data centre developers
- The difference between hyperscale, tethered and bridged data centres
- How the Regulation addresses electricity shortages and grid reliability
- How underutilized generation and energy storage can support new data centres
- How projects such as the Greenlight Electricity Centre and Meta’s Sturgeon Data Centre fit into Alberta’s BYOP approach
There has not been an event in Alberta’s recent history that triggered as large an increase in electricity demand as the development of artificial intelligence. As one of the leading hubs offering space for hyperscale data centres, Alberta has been dealing with an accelerating number of electricity connection requests.
As we discussed in How Growing Data Centre Electricity Demand Could Impact Alberta,
“The main argument is that although massive data centre growth could bring economic gains and infrastructure investment, these must be weighed against the strain on electricity and water. Achieving a smarter grid and driving decarbonization depends on careful management of these competing factors.”
When Alberta filed the Data Centre Regulation at the beginning of June 2026, it introduced an entirely new structure for data centres connecting to and operating within the electricity system. The Regulation focuses on two things: supporting data centre investment and the new electricity demand it creates, while protecting transmission planning cycles by requiring large electricity users to take greater responsibility for supplying their own power. The Regulation governs the application process for large facilities requesting 75 MW or more of transmission service, including data centre industrial load. It does not apply to distribution-connected load or energy storage.
The Regulation requires every developer to demonstrate a plan to meet their electricity needs without depending entirely on the province’s grid, including whether they will use underutilized facilities and/or pursue concurrent generation or energy storage development.
Unlike other provinces, where large electricity users simply apply for additional grid capacity, Alberta’s “Bring Your Own Power” (BYOP) approach requires data centre developers to secure or develop their own electricity generation rather than relying on the provincial grid.
Key factors of the Data Centre Regulation
At its core, the Regulation encourages data centre developers to pair generation resources with large electricity loads, in order to reduce reliability risks and preserve provincial grid capacity.
Data centre configurations considered by the Regulation:
- Large data centres with a 75 MW+ electricity load requirement
- Tethered data centres
- Bridged data centres
- Underutilized facilities
Alberta’s approach is distinct in how it treats tethered and bridged data centres, as well as underutilized generation facilities. Beyond defining these categories, the Regulation also sets out how and when large data centres may connect to Alberta’s grid by outlining the responsibilities developers must meet before receiving long-term access to the electricity system.
We’ll go through each of these in turn, but first, here’s what Alberta’s “Bring Your Own Power” approach looks like in practice:
- In 2025, the AESO set aside up to 1,200 megawatts of capacity for heavy-demand projects, such as data centres, through 2028.
- The province aims to have $100 billion in data centres under construction by the end of 2030.
- The “bring your own generation” approach requires data centres to self-supply electricity, with only a limited, temporary allowance of grid power before they fully generate their own.
Hyperscale data centres
Alberta’s stated goal is to attract hyperscale data centres, which would bring significant new investment and jobs to the province’s economy. These are generally proposed and developed by major cloud computing companies that require not only physical space, but also hundreds of megawatts of electricity.
A hyperscale data centre is a massive facility that supports large-scale workloads, with streamlined network connectivity and advanced infrastructure. Hyperscale data centres must comply with the Data Centre Regulation (effective June 9, 2026): Alberta Regulation 117/2026.
The Regulation sets the rules for how large data centres may connect to and draw power from Alberta’s grid. (It must be reviewed on or before May 31, 2030, and will expire in 2035 unless renewed.)
A data centre in Alberta is considered “hyperscale” if it draws power directly from the grid at or above the 75 MW threshold. This number is a maximum-demand threshold; however, the AESO can set it lower if needed to maintain grid safety and reliability.
Load management and curtailment priority
If the grid faces a power shortage, the Regulation places data centres at the front of the line for demand reduction, ahead of other Alberta businesses and households, meaning:
- If the AESO predicts an electricity shortage, bridged data centres must reduce demand first, before all other customers.
- If emergency load reduction is required, large data centres must reduce demand before other customers.
As we mentioned in What is Power Grid Reliability, and How Does it Impact Canadians? “Most power interruptions come from distribution failure rather than power supply shortages. Widespread outages caused by failure of the bulk supply are typically due to extreme weather and account for less than 5% of total service outage time. FERC recently added reliability standards to improve grid resilience in extreme weather events – which is important, considering that the weather has been increasingly extreme over the last few years.”
Data centre aggregation
The AESO can treat two or more data centres as a single entity when they are, or will be, physically or operationally connected and sit on the same or neighbouring parcels of land; and they are operated by, or connected for, the same company or its affiliates.
The main difference between hyperscale and traditional data centres is their size: a hyperscale facility typically includes at least 5,000 servers and can occupy millions of square feet of space.
Top hyperscale companies:
Amazon Web Services (AWS)
- Largest hyperscale cloud provider (approximately 32% global market share)
- Operates 32 cloud regions
- Approximately 33.5 million sq. ft. of data centre space
- Known for data-driven management, automation, and analytics
Microsoft Azure
- Second-largest hyperscale cloud provider (approximately 23% market share)
- Operates 62 cloud regions
- Strong integration with Microsoft enterprise software
Google Cloud Platform (GCP)
- Approximately 10% of the global hyperscale cloud market
- Operates 39 cloud regions
- Known for AI, data processing, and advanced analytics
The Regulation is not limited to hyperscale companies like Amazon or Google Cloud. It also distinguishes between tethered and bridged data centres, and beyond addressing electricity demand from data storage and processing facilities, establishes rules for how any approved data centre can connect to and operate within the provincial grid. A bridged data centre is granted a temporary grid connection, while a tethered facility is designed around an on-site (or paired) power source.
Bridged data centres
A bridged data centre is a tethered data centre that the AESO allows to connect and begin drawing power early, before its paired generation or storage project is finished.
- Time limit: up to 3 years from when power is first provided (the AESO can shorten this).
- After the time limit: if the paired supply is delivering power, the connection continues; if not, the connection is suspended or ended.
- Demand caps: the AESO can cap how much power a bridged data centre draws, both individually and across all bridged data centres combined.
- First to be curtailed: if electricity runs short, bridged data centres reduce demand before everyone else.
- Early exit: access can be paused or ended if requirements are not met, or if the paired power project is cancelled, withdrawn, or abandoned.
Tethered data centres
Tethered data centres take a different approach by supporting agreements between a proposed data centre and an energy source (generation or storage) designed to provide its full electricity supply, consistent with the AESO’s Phase 2 discussion of the “Bring Your Own Generator” model. (The AESO is expected to assess tethered data centres ahead of untethered projects, giving them a timing incentive to plan for their own generation.)
To connect a large data centre to the grid, its owner must pair it with an electricity supply: a generating unit or energy storage facility, capable of putting at least as much power onto the grid as the data centre will draw. A data centre paired this way is a tethered data centre. Requirements are:
- The paired power must be new capacity, an expansion of existing capacity, or previously underutilized capacity now put to fuller use.
- Combined output must be equal to or greater than the data centre’s maximum demand.
- Power must be supplied reliably and predictably under normal conditions.
- The AESO will not switch the data centre on until its paired supply is actually delivering power, and never faster than that supply can provide.
Priority system: The AESO must process a tethered data centre’s connection request ahead of any large data centre that hasn’t paired itself with new supply, a faster spot in the connection queue, intended to encourage developers to bring their own power rather than rely on the grid.
Bridged vs. tethered data centres
The table below summarizes where the two facility types differ, including what each must satisfy for system access service.
| Tethered data centre | Bridged data centre | |
| What it is | A large data centre paired with matching new or expanded power supply. | A tethered data centre allowed to connect before its paired supply is online. |
| Power before its supply is running? | No, its supply must be delivering power first. | Yes, temporarily. |
| Time limit | None tied to being tethered. | Up to 3 years, then continue or shut off. |
| Demand cap | Limited to what its supply can deliver. | Can be capped individually and across all bridged centres. |
| When the grid is short | Large data centres cut before other customers. | Cut first, before all other customers. |
| Key entry requirement | Commit to pair with generation/storage that meets or exceeds its demand, reliably and predictably. | Paired supply already approved by the Commission, plus AESO criteria met. |
| Queue priority | Processed ahead of non-tethered large data centres. | Shares the tethered priority (a bridged centre is always tethered). |
Entry criteria the AESO can require of any large data centre
The Regulation does not operate alone because the AESO has additional authority to evaluate each project against requirements before connection, including:
- Site control for the location
- Municipal zoning approvals
- Financing
- Permits water licences
Underutilized facilities
Alberta also aims to increase available electricity supply through underutilized facilities, using existing capacity that is not running at full output, rather than immediately building new generation.
An owner of an existing generating unit or storage facility can ask the AESO to declare it as “underutilized,” meaning it’s running below what it could deliver. The AESO measures current output and, if grid reliability allows, makes the spare capacity available for future use.
The Greenlight Electricity Centre
The Greenlight Electricity Centre is another example of Alberta’s BYOP model, combining major digital infrastructure with dedicated power generation instead of depending exclusively on the provincial grid.
The Greenlight Electricity Centre is a natural gas-fired power plant north of Edmonton that is planned to supply power to the Meta data centre. The plant is expected to generate 932 megawatts of electricity starting in late 2030, with the potential to eventually double that energy consumption. (The project is a partnership between Pembina Pipeline Corp., Morgan Stanley Infrastructure Partners, and Kineticor Asset Management.)
The Meta announcement
The Meta Sturgeon Data Centre is worth highlighting as a facility that helped shape the Regulation. As one of the province’s largest proposed AI infrastructure projects, its development timeline means the facility will need electricity before its own generation source is available.
The Meta data centre is expected to come online in the next two to three years, before the Greenlight power plant goes online. Key details:
- The first phase will draw 970 megawatts from the grid under a long-term contract with a wholesale power provider.
- Total investment in the project is $13 billion or more.
- Meta’s Sturgeon Data Centre will use a closed-loop, liquid-cooled system with dry cooling, requiring no operational water use for cooling. Water use on-site will be limited to domestic needs, fire protection, and equipment maintenance.
- Capital Power announced a long-term energy supply agreement for the Meta data centre, with 250 megawatts of electricity available in the second half of 2028.
Quote provided to EnergyRates.ca by the Office of the Minister of Affordability and Utilities:
“Meta’s data centre project secured 970 MW of the 1,200 MW allocated through the first phase of the Alberta Electric System Operator’s (AESO) Large Load Integration operation in the fall of 2025, and is not a tethered or bridged data centre.”
The Greenlight Electricity Centre can serve both the Meta data centre and Alberta’s grid. While the plant will primarily serve the connected data centre project, it’s expected to produce surplus baseload electricity that could add flexibility and reliability to Alberta’s grid — particularly when cooling demand is lower.
The estimate of up to 6% in reduced transmission costs is based on Meta’s contract for the 970 MW of grid-connected power. Transmission system costs are shared among ratepayers based on usage, meaning the shared cost per user is expected to decline as the project draws power from the grid.
Closing
While Alberta’s Data Centre Regulation reflects the province’s intent to bridge digital infrastructure and energy systems, many residents still question whether it will be effective and whether it can genuinely reduce pressure on the grid without altering future electricity costs.
The Regulation is designed to protect the provincial grid during electricity shortages, meaning data centres would not be a priority in times of scarcity, and their allotted electricity could instead be redirected to other businesses and residential customers.
Proponents of the province’s fast data centre expansion note that the Regulation guarantees each AI facility must coordinate with Alberta’s electricity planning, requiring developers to factor in electricity supply strategies and work within AESO’s rules under the BYOP model from the earliest stages of project proposal and implementation.
Key takeaways:
- Alberta’s Data Centre Regulation applies to large facilities seeking 75 MW or more of transmission services.
- The Regulation establishes new requirements for connecting to the provincial electricity system.
- Under Alberta’s Bring Your Own Power (BYOP) approach, large data centre developers are expected to plan for their own electricity supply rather than relying on the provincial grid.
- Tethered data centres must be paired with new or previously underutilized generation or storage capable of meeting their maximum demand.
- Bridged data centres can temporarily (up to three years) draw electricity from the grid before their paired power source is operational.
- Large data centres can be curtailed before other customers during electricity shortages.
- Alberta is also looking to underutilized generation facilities to increase available electricity supply without building new power generation.
- The Regulation is intended to require developers to account for grid reliability and system planning while allowing data centres investments to continue.
