Powering Canada: Electricity and Data Centres

John Stackhouse: And Sonia, welcome to 2025. Happy New Year.

Sonia Sennik: Hey John, a very happy Y2K. 25 to you. How were your holidays?

John Stackhouse: They were ChatGPT pretty good. In fact, they almost went sideways because of ChatGPT. I tried to lay out an itinerary and got a very good plan. But for the wrong year. I’ll blame myself for being a substandard prompt engineer. How about you?

Sonia Sennik: Mine was, I would say, a light touch digital holiday season. Mostly Mission Impossible movies.

John Stackhouse: Those holidays are often the best, the kinds where we get to unplug. Unfortunately, unplugging is not a big trend in society right now, and that’s going to have a lot of consequences. I’m excited to be talking in this episode about the power struggle, as we called it in a recent report that’s coming from all [00:01:00] those ChatGPT queries and so much more. We’re going to need a lot more power, a lot more juice, a lot more electricity. I was struck by one fun fact over the holidays that one, okay. ChatGPT query uses about 10 times as much power as a typical Google search.

Sonia Sennik: Absolutely, John. As our reliance on computational power grows and grows, so does the demand for sustainable energy solutions. And part of that is data centers. To use AI models, requires computation. In order to have massive amounts of computation, you need massive amounts of energy. It’s front of mind right now for policymakers and world leaders alike.

John Stackhouse: That’s both exciting and a little bit concerning. I’ve read that simple training models are taking on more and more power. And in fact, the power used to train ChatGPT 4 versus 3 is up 5x. If you just think of two prompts that many of us might have done, those would be equivalent to powering your [00:02:00] iPhone overnight. So think of the power that’s going to be needed when all of us are doing that hundreds or maybe thousands of times a year.

There’s already a bit of a gold rush on to power all those data centers. Our research shows that there are 15 gigawatts of data center projects in application in Canada, which would produce the same amount of electricity that’s consumed in a year by 10 million homes. It’s a daunting challenge, but also a huge opportunity for Canada.

We have all the energy sources that are needed, whether renewables to power much of the world’s data center economy

Sonia Sennik: As intelligence increasingly relies on electricity, how can Canada innovate to meet the growing energy demands sustainably? So today we’re exploring how startups and policymakers are balancing this equation, meeting the rising energy demands without compromising sustainability.

John Stackhouse: We’ve got a new report out from the RBC Climate Action Institute called Climate Action 2025. It’s our [00:03:00] annual assessment of how Canada is doing on the journey to net zero. The report is full of amazing and interesting data. But one of the points I wanted to highlight here is a section that we call the “Idea of the Year”.

And our Idea of the Year is electricity. We have an opportunity and a need to invest significantly right now in our electricity capacity, because while we’re feeling the pinch today, think of what it could be like in the 2030s. Here’s one of the authors of the report, Shaz Merwat, who’s the energy policy lead in the Climate Action Institute.

John Stackhouse: We asked Shaz what the biggest challenge is in getting all this done.

Shaz Merwat: The key theme of this year’s report is really around electricity, and the key challenge there is really just growing the grid. Up until before this mad AI gold rush, we really were focused on greening the grid, getting off coal, to switch to renewables.

But AI has changed that. AI is a substantial draw of power. We’re talking a [00:04:00] tripling in load demand from here to 2050, all within a rate regulated return sector. So not only are you trying to meet that demand growth, but you’re also trying to keep electricity affordable to the average consumer throughout that entire journey.

That’s the challenge.

John Stackhouse: Sonia, listening to Shaz, what do you think the biggest opportunity is for us this year?

Sonia Sennik: It’s going to sound like an answer I give often, John, but innovation. The opportunity to evolve how we think about producing electricity, delivering it, and creating the data centers of the future.

Sonia Sennik: And Alberta’s Minister of Innovation, Nate Glubish. We’ll explore with him how policy and industry can work together to support Canada’s leadership in this space.

John Stackhouse: Minister, welcome to the podcast.

Nate Glubish: Thanks for having me.

John Stackhouse: It’s remarkable to think back to 2024 and all that evolved rather quickly on the AI front.

John Stackhouse: And Alberta was often leading the conversation, particularly when it came to data centers. Kevin O’Leary had [00:05:00] that eye popping announcement of the $70 billion opportunity. But you’re also laying out a pretty ambitious innovation strategy for Alberta in what we might call the data economy of the future.

Maybe give us a quick sense of where you think Alberta can be going out a decade.

Nate Glubish: Well, in a nutshell, we want Alberta to be one of the most innovative jurisdictions in all of Canada and one of the most innovative in the world. And we know we can do it. We’ve been investing in AI research long before it was cool.

It started 20 years ago with the foundation of the predecessor for the Alberta Machine Intelligence Institute when we recruited global superstar, Rich Sutton, and built a team around him and gave him resources. And lo and behold, 20 years later, Alberta is known around the world as one of the top five research jurisdictions for AI.

John Stackhouse: Data centers are increasingly a key part of that. Where’s the advantage for Alberta?

Nate Glubish: We know that there are going [00:06:00] to be hundreds of billions of dollars of investment made over the next five to 10 years across North America alone to build out more data center computational infrastructure. And we believe that Alberta can play a significant role in helping to meet that need.

We released Alberta’s data center strategy at the end of 2024 to send a signal to the world that we intend to be one of the destinations of choice for this infrastructure. And we’re happy to work with anybody, whether you’re an investor, developer, a user of AI technologies. We want to work with you to help make sure that you get the compute infrastructure you need built.

Sonia Sennik: How do you see our position globally? What are the key points you’re driving home with regards to how we can really lead in data centers?

Nate Glubish: Well, I’ve been traveling all over the world to talk about AI data centers and to promote Alberta’s vision. And what I hear, no matter who I talk to, it’s the same. The two most important factors are access to electricity at scale and [00:07:00] speed to market.

So, Alberta has a lot of unique advantages that can hit home on each of those two points. First of all, we are blessed with an abundance of natural resources. We have some of the largest natural gas reserves on planet Earth. And we have world class expertise that knows how to develop it responsibly. Any new AI compute infrastructure is going to require net new power generation built right alongside of it.

And so one of the things that’s unique about Alberta is that we already have a regulatory framework that contemplates the locating of power generation resources right next to the industrial load. We’ve been doing it in the oil sands for decades. We can work with industry to say, well, if you want to build a natural gas fired power plant right beside a data center so that you have all of the power that you need right on site and you don’t need billions of dollars of transmission infrastructure and distribution infrastructure, this is one of the only places on Earth where you can do that.

So we’re going to work with industry to make Alberta the easiest place to get [00:08:00] to construction of this new infrastructure.

Sonia Sennik: How soon do you think it’ll be before we see a carbon captured natural gas-powered data center in Alberta?

Nate Glubish: So Alberta is also a world leader in carbon capture technology. We have millions and millions of tons of carbon that has already been captured and sequestered underground. This is some technology that’s been pioneered over the last 10 years by Alberta companies and about Alberta researchers and innovators.

Nate Glubish: And so if there’s any place on planet earth where it makes sense to build a natural gas fired power plant that is net zero with carbon capture, it’s in Alberta. What we’re seeing right now initially is again, speed to market is the most important thing. So folks are focusing on how do I get the natural gas power approved under construction and in the queue so that we can get up and running right now.

Let’s keep the carbon capture as an option later. And once we get the project up and running, once it’s cash flowing, once the power is [00:09:00] powering a data center, which is now creating a value-added tools and services that the world needs and is paying for, then they can invest in the crime and capture. So we’re optimistic that this is possible and that there’s no better place in Alberta to do it.

John Stackhouse: Now, I don’t need to remind you or any of our listeners. It’s obviously 2025 and we’re into a new era, certainly in terms of our relationship with the United States. And there’s going to be a lot on the table this year. How are you thinking about the dynamics between Canada and the United States in the years ahead, in terms of the data economy and all that you’ve been talking about here?

Nate Glubish: I think over the last several months, as we’ve seen, President-elect Trump talk about some of his plans when he takes office later in January.

Of course, this is a pivotal moment for Canada. We’re facing the threat of tariffs. So, what our approach in Alberta has been generally is to say, look, Canada has always been a great partner to the US. We [00:10:00] supply millions of barrels a day of oil and gas to American markets. And then they go and they refine it and they turn it into value added products and they export those all around the world.

So, we are enablers of enormous job creation and wealth creation in the US we’re good partners in that. And we want to continue being good partners in that.

And so we want to send that signal to President-elect Trump and his administration that we’re here to be good partners with you. We bring a lot to the table. You rely on a lot of these things. It helps to create jobs and wealth and drive investment in the US. And it also benefits Alberta. It’s a win win. Let’s not rock the boat here.

And let’s talk about data centers specifically. Look at the NASDAQ. What are the top companies on the NASDAQ? What is the lion’s share of the market cap of the stock market in the US?

It’s all of the big tech companies. And their biggest threat to being able to continue growing and to realizing their fullest opportunity is access to electricity at scale in order to power the data center infrastructure that they are going to [00:11:00] need. Texas can’t do it all, Oklahoma can’t do it all, Ohio can’t do it all, and Alberta can’t do it all.

But together we can do it, and Alberta needs to be a significant part in that equation. So our message to the US is let us help you solve this problem. It’s a once in a lifetime problem, but it’s a once in a lifetime opportunity. We’re here and ready to help, ready to scale, ready to power your hyperscalers and to power all of the innovative companies in North America that need this technology.

We’re here to help so let’s work together.

Sonia Sennik: Minister, I wonder how Canada can take this opportunity to really set the bar for world class data centers. How can we innovate on the cooling technology, the robotics, the design, everything that goes into building the data centers of the future? How do you see attracting and inspiring researchers and innovators and creatives to come together to rally around us building best in class facilities?

Nate Glubish: Well, I think that was an underlying motivation behind Alberta releasing our AI [00:12:00] data center strategy in December is to send that signal to the entire world to say, we aim to be one of the most exciting places in the world for the development of this technology and for the construction of this infrastructure.

The folks who are going to be innovating and creating the new tools and the new technologies that will bring about next generation advances in AI data center technologies, whether it be cooling, processing, load management, whatever it might be, they’re going to want to be located close to large installations at scale, which is why the Wonder Valley project, we haven’t really got into the details on that one just yet, but that’s why this one is such an important opportunity for Alberta.

Imagine if the largest data center complex in the entire world is located in Alberta. Of course, companies who are developing next generation technologies that that will go into these installations are going to want to be close to the biggest and the best. And hopefully as we continue getting more and more folks up to speed on all of the advantages we have, all the infrastructure that we intend to, to see [00:13:00] developed that the folks who want to play a role in the next generation of these technologies, will see Alberta and and see Canada as a logical home for them.

John Stackhouse: Minister, tell us a bit more about the Wonder Valley project and also what you are hoping it leads to.

Nate Glubish: I got to give a lot of credit to the municipal district of Greenview. Long before data centers were in the public consciousness, they got together and said, you know what, we want to be entrepreneurial. We’ve got a lot of land. We’ve got a lot of expertise. We got a lot of infrastructure. We know that we could be a destination for large industrial projects at scale. We don’t know what kind of projects they’re going to be. Perhaps there’ll be oil and gas related, but we know that we can be a host to this.

So what do we need to do to make our municipality attractive? And so they got to work in basically saying, well, what are all of the approvals in this large parcel of industrial zoned land that we have that we could actually [00:14:00] go on spec and get done so that as long as some kind of future infrastructure project fit within these goalposts.

That we could say, oh, approvals are already done. Consultations are already done. We’ve done all the legwork. We saved you years and years of time. And so that’s exactly what they did.

And so now fast forward to today, they didn’t know it was going to be a data center. But once those dots got connected, it just made perfect sense.

So Kevin O’Leary and his team have said: Okay, well, if we’ve got a lot of these approvals in place, what do we need to do? We need to build the power generation. We need to source the gas. And then we need to get the data center up and running. So, the vision for this project is it’s going to be an off grid project.

They’re going to build their own power generation. They’re going to build in their own redundancy. The natural gas from the region will be brought into site. It’ll be converted to electricity on site. The electricity will be fed into the AI data center on site. And, the economies of scale of being able to do it that way, where you don’t need all the transmission and distribution infrastructure, and you’re located right next to the [00:15:00] gas, allow for them to have natural gas fired power at extremely low cost, which is making this a very attractive play for them.

Nate Glubish: So their plan right now is to build the first, I think, one and a half gigawatts of power generation, and that’s what they’re working right now on lining up the investment for. And they’re hard at work on all the engineering and building the partnerships with the natural gas players, building partnerships with first nations in the region, working with the municipality, etc.

Nate Glubish: Once they’re able to get the natural gas power generation in construction, that will be the signal that the hyperscalers and all of the other customers for the AI compute infrastructure are going to look at and say, you just started talking about this, and now you’ve got one and a half gigawatts of power underway, and it’s going to be ready in a year and a half to two years.

Nate Glubish: This is a game changer. And you’re also talking about scaling this to between five and seven gigawatts of power on this single site. So it’s very exciting. It has the potential to be up to $70 billion of investment into Alberta. [00:16:00] It would lead to the largest data center installation in the entire planet.

John Stackhouse: You kicked off the conversation, Minister, talking about Alberta’s journey in AI, which goes back decades, and frankly, we at RBC have been lucky to be part of that. You are more than the Minister of Data Centres, you’re the Minister of Technology and Innovation. I wonder, as we wrap up, if you can give us a sense of where you see Alberta in the years ahead in the innovation space beyond data centers?

Nate Glubish: Sure. Well, one of the biggest opportunities for Alberta to really make its mark and send a signal to the world that this is a really exciting jurisdiction, i f you work in technology, if you use AI, if you’re excited about the possibilities of this, that Alberta would be the place for you to call home. Or at least a place for you to invest or to expand.

And that is for the use of AI inside of government. So. We’ve recruited a new Deputy Dinister in my department. His name’s [00:17:00] Janet Golford. Uh, it comes to us from FinTrac from the federal government. He was their head of AI and he actually has expertise in building AI technologies. He did it in the private sector before with his own business.

Nate Glubish: He’s done it in government at the federal government level and now is helping to support my vision to use more technology in government. And I’ll give you one example. So we all like to complain about procurement in government. It takes forever. It’s painful. Like for us to procure anything, it takes at least seven months.

Nate Glubish: So, imagine a world where we could get the folks who need to procure something in government together and say, what do you need? Let’s just talk it through. Okay. Let’s upload all of that stuff into a procurement GPT engine that we’ve built. That’s secure. It’s on a private server. It’s, it’s all in house.

Okay. And have it automatically parse all of that and then put it into a trade agreement, compliant RFP and make it super easy so that in minutes, instead of months, you can actually design your RFP. And then on the flip side, working with the folks who want to bid on doing work with the [00:18:00] government, have a GPT platform and portal that they can go through and say, link your website, upload all of your documents, all of your PDFs, all of your marketing materials, upload all of your white papers, anything you’ve published about what, what you’re offering.

Nate Glubish: Okay. And it’ll automatically parse this and match it to the RFP. And then in minutes, give you an assessment to say, okay, we think this is what you’re proposing to bid on and how you’re proposing to do it. So that then it literally in minutes, you could apply to an RFP. Our vision is to say, how do we go from seven months to seven days?

And maybe even overshoot that and get shorter. How do we use AI? Use these new tools? They’re not the tools of tomorrow. They’re the tools of today. And that’s one out of dozens of examples that I could give you of ways that we’re looking to harness AI to improve how we do business as a government. And our hope is that as folks start to see more of this, get off the ground, that they’ll say, wow, Alberta is an exciting place to be, I got to spend some more time there.

John Stackhouse: You’ve got the energy, you’ve got the infrastructure, you’ve got the people. And as you’re laying out [00:19:00] here, you’ve got the ambition. I hope we can have you back to talk about how Alberta is racing ahead in this exciting new age, happy to come back anytime. Thanks for having me.

Sonia Sennik: Thank you so much Minister for your time.

Sonia Sennik: Now we’re thrilled to be joined by Doug Beach, CDL-Rockies mentor and chair of Eavor Technologies. Doug is here to discuss how advanced geothermal energy solutions could reshape how we power our intelligence. Doug, welcome to the podcast.

Doug Beach: I’m really happy to be here. Thanks a lot.

Sonia Sennik: So electricity has always been important. But why does it matter now more than ever?

Doug Beach: Well, I think the key thing on top of everybody’s mind is the consumption of data processing and the incredible demand or increase in demand that’s driving at the increment. So we’ve got energy and everything, and now we have even more demand coming rapidly.

Doug Beach: And the stability of the supply of the energy is so incredibly important relative to the information processing demand. And so [00:20:00] that’s, that’s another societal rub that will have to be met.

John Stackhouse: So, Doug, we’re talking about data centers as if they’re kind of the new, new thing. And of course, they’ve been around for decades. Give us some insight into why in 2025, the energy demands of the information age, which is what data centers are all about, may be different.

Doug Beach: Well, I think the obvious one is just the explosion of AI and the ubiquity of the availability of AI in that large language models offered by so many participants right now mean that you’ve democratized access.

So you’ve got all manner of people trying to do all manner of things experimentally right now. And it’s driving a lot of demand that we don’t necessarily know the value of yet. And, all the participants are in a bit of an arms race in order to meet that demand. And so, being available 24/7, 365, stably, and fitting in around all the other [00:21:00] streaming demand and other such entertainment demand I would call it is just incredibly important. People will not accept latency and disruption.

Sonia Sennik: The foundation of our evolving intelligence economy is energy, no doubt. And Doug, you spend a lot of time working with CDL Alumni company, Eavor Technologies, where they’re advancing closed loop geothermal technology. How does a company like Eavor fit into this puzzle?

Doug Beach: Eavor fits into it in several interesting ways, particularly in the local dimension of Canada. We’re starting out as essentially an export technology. So we’re creating a technology that will enable energy development almost anywhere on the planet. And it’s going to necessarily be cheaper at places that tend to have more heat.

We’re starting in places that have energy security problems primarily and that have higher prices. So the beginning parts, as you can see, Eavor is scaling in [00:22:00] Europe and targeting those spaces, Japan, and others. Eavor is developing additional technologies that will advance this further and ultimately allow the development of energy even into Canada, but that will still be a little bit of time down the road.

Doug Beach: One of the interesting things that is happening inside of Alberta relative to the development of advanced geothermal technologies is a focus on developing drilling technologies and Eavor is working in Alberta with the Alberta government to develop a technical specialization capability within the province that we’ll advance drilling for, certainly forever, but for other geothermal technologies, other commodity development technologies too.

Sonia Sennik: What barriers would you say, Doug, are the most significant as a company like Eavor scales?

Doug Beach: Generally speaking, you know, the first thing that was important ever was not having to [00:23:00] reinvent the wheel. So, being able to go to places that had regulations and governance that dealt with the production of geothermal energy and property rights around geothermal energy and all of the things that have already developed around other industries, hybrid, hydrocarbon industries and stuff, how do you own what comes from the space then where you’re developing it?

And how do you know that there’s longevity around that? And how do you manage those processes? What is the process for permitting and ownership of rights to permit? And then consistent treatment among the technologies that solar, wind, hydrocarbon, and geothermal are all competing on a consistent playing field?

Those are the things you may need to look for. The rest of it is energy markets, and those are well developed.

John Stackhouse: Doug, there are some people who will hear this and think, is this the best use of scarce [00:24:00] energy resources to essentially power the processing of data to enable Americans to do their ChatGPT queries and ship it to Canada to process and ship back. Shouldn’t we be using our strategic advantage in energy for something a little higher value? What do you say to them?

Doug Beach: Well, a couple of things. One, the market will sort that out. And so to the extent that a dear resources being mispriced right now, ultimately, that’s going to draw on margins inside of the people who are providing LLMs and that kind of stuff. They will ultimately have to, to drive their own market discovery process, at least internally, if not externally, to the extent that they decide to develop their own energy, which a lot of them are doing.

If you look at the deal that Microsoft did with regard to Constellation Energy and the restart of Three Mile Island. So, if you look at [00:25:00] those kind of considerations, you can recognize that the value of this dependability, predictability, clean, and the premium that they’re willing to put on it.

And so, bridging to another concept, and that is this could be a moonshot opportunity in certain ways where the value of all that certainty to these participants means that they may bring on additional resources of energy based on values that they have.

Doug Beach: Only they presently see and that directionally should unload the system relative to other demand. So, to the extent that nobody else was looking at bringing on Three Mile Island or bringing on an Eavorloop installation or an SMR or additional hydro in remote northern Canada. potentially that can be anchored by this kind of base demand to go with that new base supply and [00:26:00] potentially offer an overhang of additional capacity. I think it actually can change the entire supply demand setup.

John Stackhouse: There’s another view out there that data centers are essentially another version of warehouses for the information age, kind of low value. And yet they can be very sophisticated and there may be an opportunity here for Canada to become a world leader in all that goes into data centers. Are you seeing a Canadian advantage emerging in the data center economy and how do we both keep that and build on it?

Doug Beach: Yes, I see some really interesting things going on. Another colleague, uh, inside of CDL is actually working with a group of people to potentially develop a string of data centers in Alberta that would ultimately consume natural gas, I believe, and deliver CO2 into the developed environment and deliver CO2 sequestration facilities in the region.

And one of the big advantages that Canada offers is we’re cooler, [00:27:00] and, in so many ways, but in terms of energy wise, we’re, we’re cooler in terms of temperature. And that’s creating an opportunity to create a clean information supply that. It’s kind of a unique offering based on the resources that Alberta has, but I think that model could be done in Canada and other places using their local energy capabilities.

And that’s moving faster than, for example, Eavorloops will be developed in Canada, sadly on the one hand, but happily on the other.

Sonia Sennik: Doug, thank you so much for your time. This was awesome.

Doug Beach: I really appreciated giving it a go.

John Stackhouse: Sonia, when we started this episode, I was feeling a little bit guilt stricken. About all the power that would be required for some of my frivolous wanderings into the world of generative AI, not to mention all the serious work going on in that space. But having listened to Nate [00:28:00] and Doug, I see the opportunity here, for Canada particularly to not just develop the energy sources for the digital economy and for an age of gen AI that we’re already well into. There’s also an opportunity to build whole new approaches to innovation right across the economy.

Sonia Sennik: Absolutely, John. And that saying goes, history doesn’t repeat, but it often rhymes. And I’m thinking about how when we started our open pit mines in Canada, we naturally placed our smelters and refinery right nearby.

We had innovators in that space, building new processes and engineering systems that had never existed before. Listening to Minister Glubish talk about how the opportunity to create these data centres right next door to limit the transmission costs and complexity in transmitting electricity to these incredible energy sources, I had flashes of the comparison to where we’ve seen ourselves before here in Canada.

[00:29:00] And now we have an opportunity, as you mentioned, to build an innovation ecosystem around this to create truly best in class data centers and energy production facilities, attracting talent from all over the world to Canada to build on this.

So how can we engage with innovators and creators that are developing robotics, cooling systems, energy delivery, design efficiency for data centers? I’m excited to see the applicants we get into Creative Destruction Lab this year in and around this amazing challenge and opportunity.

John Stackhouse: It’s a new age for data centers and all that goes into them, and Canada can lead the way.

John Stackhouse: Sonia, thanks for the conversation.

Sonia Sennik: Thanks, John, and a big thanks to Minister Glubish and Doug for joining us today.

Be sure to subscribe, leave a review, and join us next time as we continue exploring the groundbreaking ideas shaping Canada’s economy and beyond.

John Stackhouse: This is Disruptors and CDL, the Innovation Era.

John Stackhouse: I’m John Stackhouse.

Sonia Sennik: And I’m Sonia Sennik.

John Stackhouse: Talk to you [00:30:00] soon.

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