TransAlta signs data centre deal with CPP Investments and Brookfield | CBC News
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Electricity generator TransAlta Corp. has announced plans to power a new data centre west of Edmonton in partnership with the Canada Pension Plan Investment Board and Brookfield, which comes as the Alberta government aims to grow that nascent industry without overburdening its grid.
TransAlta said Friday that the memorandum of understanding with the two investment firms sets out a framework for the development of a data centre at its Keephills power plant, which was retooled to run on natural gas instead of coal in 2021.
The agreement includes an initial long-term power purchase agreement for about 230 megawatts of power, potentially growing to 1,000 megawatts.
TransAlta is sharing few other details until it, CPPIB and Brookfield finalize the deal, which it expects to happen later this year.
“We’re pleased with the overall arrangement that we have and think it’s a really sound one from a commercial perspective,” said CEO John Kousinioris during his final analyst conference call before he retires.
Joel Hunter, currently chief financial officer, is to succeed Kousinioris.
Data centres are enormous facilities that house the computing firepower needed for artificial intelligence and other applications. Such operations require massive amounts of energy to run and cool the machinery.
The Alberta government aims to attract $100 billion in data centre development by the end of this decade, hoping to lure tech behemoths like Meta Platforms Inc. Some power generators have been looking at opportunities to provide power exclusively to a tech partner, while others have been eyeing options to add more juice to the overall grid.
The provincial grid operator is allowing the connection of up to 1,200 megawatts of large-load projects until 2028 — a small fraction of what had been requested — so as not to compromise reliability.
There’s no more power for AI data centres in Alberta. At least, for now. The Alberta Electric System Operator (AESO) has a temporary cap of 1,200 megawatts for large-load projects and says it has already allocated all of its capacity to a pair of data centre projects slated for near Edmonton. But the province is pressing ahead with a bring-your-own-power solution.
TransAlta had that limit in mind as it cast about for data centre partnerships and was fortunate to have arrived at a deal with CPPIB and Brookfield, said Kousinioris.
“It would be great to have hyperscalers, and we certainly do expect and hope that they end up coming into the jurisdiction,” he said, referring to tech giants like Meta and Amazon that would likely require much more power than is currently available.
“We were very pleased that we were able to have (CPPIB and Brookfield) as partners because their expectations aligned with the reality of what we thought the pathway was going to be to development in the province.”
Meanwhile, TransAlta said its retooling of a Washington State power plant is moving ahead despite a U.S. Department of Energy order late last year that it be kept online three months longer than planned.
Coal-fired generation had been set to wind down at the Centralia Unit 2 facility by the end of 2025 before the plant was to be converted to run on cleaner-burning natural gas. But the U.S. government ordered that it remain available for operation until March 16.
The province is pushing for more AI data centre investments but not all Albertans are as enthusiastic, citing concerns about their impact on the environment. The CBC’s Rukhsar Ali takes a look inside a high-tech facility to find out if ‘sustainable’ data centres are possible.
TransAlta has said the switch from coal to natural gas would cut Centralia’s emissions intensity by half. The conversion is expected to cost $600 million US with an in-service date of late 2028.
“We do have the ability to recoup our expenses, which is why we’re not particularly concerned about that from a 2026 perspective,” said Kousinioris.
It’s also “full steam ahead from a regulatory and planning perspective” for both TransAlta and customer Puget Sound Energy Inc. on the conversion, he added.
TransAlta’s shares were trading up more than five per cent on the TSX Friday afternoon.
Earlier in the day, TransAlta raised its quarterly dividend and reported a fourth-quarter loss attributable to common shareholders of $62 million compared with a loss of $65 million a year earlier.
The company will now pay a quarterly dividend of seven cents per share, up from 6.5 cents.
TransAlta says its fourth-quarter loss amounted to 21 cents per diluted share compared with a loss of 22 cents per share a year earlier. Revenue for the quarter totalled $599 million, down from $678 million a year earlier.
On an adjusted basis, TransAlta says it lost six cents per share in its latest quarter compared with an adjusted profit of a penny per share in the fourth quarter of 2024.