O’Leary’s “Wonder Valley” just the tip of data centre potential
In early December, Kevin O’Leary – “Mr Wonderful” of Dragon’s Den and Shark Tank fame – opened the eyes of North America’s growing data centre market with news he plans to develop a massive 7.5 GW campus in northern Alberta powered by natural gas, with some geothermal potential in the future.
Dubbed Wonder Valley, the data centre would encompass 35mn ft2 in 58 buildings, making it the largest artificial intelligence (AI) data centre in the world. It would be located in the Greenview Industrial Gateway (GIG), an industrial park development near Grande Prairie, in northwestern Alberta.
The location was no mistake. Grande Prairie lies at the heart of Alberta’s massive Montney and Deep Basin natural gas complex. Together, those two basins offer more than 140 trillion ft3 of natural gas resource potential, not to mention another 250 trillion ft3 in the easily accessible BC Montney Basin, according to figures provided by Calgary energy consultancy Incorrys.
The area offers the added benefit of a cool climate, which reduces energy costs associated with data centres that consume massive amounts of power, and would be developed close to substantial carbon storage potential, which makes low-carbon power production from natural gas a much easier sell.
“The GIG’s ideal cold-weather climate, a highly skilled labor force, Alberta’s pro-business policies and attractive tax regime make the GIG the perfect site for this project,” O’Leary enthused. “We want to deliver transformative economic impact and the lowest possible carbon emissions afforded to us by the quality of gas in the area, our efficient design and the potential to add Geothermal power as well.”
Ambitious Alberta
Only days before O’Leary’s unveiling of Wonder Valley – perhaps not coincidentally – the government of Alberta set out to position itself as the destination of choice for data centre investments, noting the three pillars it had identified to attract global AI developers: power capacity, sustainable cooling and economic diversification.
“Artificial intelligence is behind all the newest technologies we rely on to make our lives better, simpler, safer,” Alberta Premier Danielle Smith said. “There’s incredible opportunity around artificial intelligence and we are unafraid to dream big. This strategy will position Alberta as the place to invest and build AI data centres, further building on our reputation as a province with no limit to innovation and opportunity.”
What is driving Alberta’s ambitions to grab a slice of an AI data centre market that could be as big as US$820bn by 2030 is the province’s abundant natural gas resources, a world-class power industry built on that natural gas advantage and a competitive power market that opens the door for AI companies to partner with Alberta’s electricity sector.
“Alberta is uniquely positioned to capture the AI data centre opportunity, leveraging our vast natural gas resources and pro-business environment to create thousands of high-quality jobs and attract billions in investment,” said Nate Glubish, the province’s Minister of Technology and Innovation. “This strategy is not just about building infrastructure; it's about fostering innovation and establishing Alberta as a hub for high-tech industries, driving economic growth and supporting critical public services like healthcare and education.”
But the data centre sector didn’t wait for Alberta to come to it; it has already come to the province, and the Alberta Electricity System Operator (AESO) says it has 12 data centres on its current project list totalling nearly 6,500 MW of future load. Currently, the province has about 1,000 MW of surplus dispatchable generation.
That will help support what Incorrys forecasts will be 0.6% annual growth in gas-fired power demand to 2050, growth which includes anticipated AI and data centre demand, not including Wonder Valley, Ed Kallio, its executive advisor, tells Natural Gas World.
Western Canada’s existing natural gas resource potential – most of it in Alberta – will help meet that demand, he says, with an estimated 441 trillion ft3 of remaining resource potential in Alberta and BC available at or below US$3/’000 ft3.
“There is a staggering amount of low cost, 'just-in-time' productive potential available to come online, as and when needed, and basin production can adapt very quickly to new demand,” Kallio says. “Western Canada doesn’t have a gas resource problem, it has a market access/demand problem.”
Projects like O’Leary’s Wonder Valley can certainly help with the market access problem, he adds, as it’s “ideally positioned” to take advantage of the “huge” resource potential from the Montney and the geological potential in the region for carbon capture and storage.
Wonder Valley isn’t alone
But Wonder Valley isn’t the only data centre project on the books. Earlier this month, Gryphon Digital Mining, active in the bitcoin and AI space, signed a definitive agreement to acquire Captus Generation and its 850-acre industrial site 20 km south of Pincher Creek, in southern Alberta, which it says will enable a “substantial expansion” into AI and high-performance computing (HPC) data centre infrastructure.
The acquired asset, Gryphon said, has the potential to scale to 4 GW of sustainable power generation capacity fueled by natural gas and supported by on-site carbon sequestration.
“We believe that this acquisition represents a transformative moment for Gryphon as we aggressively expand into the AI/HPC infrastructure market,” Gryphon Digital Mining CEO Steve Gutterman says. “The combination of dual natural gas supply, on-site carbon sequestration and abundant water access makes it one of the few locations in North America with all the critical elements needed for large-scale AI computing.”
Last October, Captus Generation submitted a System Access Service Request (SASR) asking the AESO to assess a potential generation capacity project of up to 440 MW as part of its Cluster 2 assessment process.
Late last year, Gryphon also acquired natural gas assets in northeast BC in a move which it says is a “crucial first step” in securing a competitive advantage in bitcoin mining and AI operations by acquiring significant power-generating assets.
The pending acquisition, from privately-held Erikson National Energy, includes “hundreds of existing natural gas wells that contain over 5 trillion ft3” of contingent natural gas resources and more than 140mn ft3/day of infrastructure capacity.
The project is expected to have initial capability to power 100 MW of operations, Gryphon says, with the potential to expand to as much as 1 GW.
And Beacon Digital Infrastructure, based in Ireland but with a Calgary office, is also planning a significant push into Alberta data centres, with media reports suggesting the company is planning as many as five AI data hubs with total load of about 1.2 GW. Three of those – near High River and Indus outside Calgary and Spruce Grove, west of Edmonton – are already in the AESO development queue.
With most of the potential data centre power generating capacity in western Canada being developed with CCS capabilities, there hasn’t been much worry north of the border about the environmental implications. The US, however, is a different story, with concerns surrounding gas use instead of renewables and a reluctance from utilities to invest in the infrastructure needed to support data centres.
Still, Meta (the parent of Facebook and Instagram) is pushing forward with investor-owned utility Entergy Louisiana to build a 4mn ft2 data centre on a 1,400-acre site in Richland Parish, Louisiana.
Entergy Louisiana said it would support the project by building three gas-fired combined cycle power plants with a total capacity of 2,260 MW – two nearby in Richland Parish – along with new transmission lines and substations. To offset emissions, the new power plants would be capable of burning a 70/30 blend of natural gas and hydrogen and could potentially be converted to 100% hydrogen – or equipped with CCS capabilities – at a later date.
And US major ExxonMobil is also pursuing data centre investments, revealing in December that it is designing what it calls a “massive” gas-fired power plant dedicated to producing power for data centres. Reports suggest the facility would have more than 1,500 MW of generating capacity and be equipped to capture 90% of emissions.
“There are very few opportunities in the short term to power those data centres and do it in a way that at the same time minimises, if not completely eliminates, the emissions,” ExxonMobil CEO Darren Wood said on a media call.
Cost or location of the proposed plant were not disclosed, but ExxonMobil has said it had secured land and was talking with potential groups to buy the power. It also said the facility would not be connected to the US power grid, which could smooth permitting and construction.