The hum of servers could soon replace the roar of turbines as TransAlta Corp. advances plans to develop major data centres across Alberta, a strategic pivot revealed Tuesday as the company reported a significant dip in second-quarter profits.
TransAlta CEO John Kousinioris outlined the ambitious strategy during an investor call, positioning the Calgary-based power generator to capitalize on Alberta’s growing reputation as a data infrastructure hub amid surging artificial intelligence demands.
“We’re actively pursuing the development of large-scale data centres,” Kousinioris explained. “Alberta offers compelling advantages that make these investments particularly attractive – abundant land, competitive power costs, and a regulatory environment that supports rapid development.”
The vision includes potentially converting underutilized generation sites into data centres, leveraging TransAlta’s existing power infrastructure and land assets. This transformation comes as TransAlta reported net earnings of $17 million for Q2 2024, a stark contrast to the $75 million posted during the same period last year.
Revenue also declined substantially, falling to $529 million from $824 million year-over-year, with the company attributing the downturn to lower electricity prices across Alberta’s energy market – a decrease of 44% compared to 2023’s second quarter.
“While we’re navigating market headwinds, our fundamentals remain strong,” Kousinioris noted. “Our operational capacity remains excellent at 89.6%, and we’ve maintained financial stability through disciplined capital allocation.”
TransAlta’s data centre initiative reflects a broader industry trend as power generators diversify beyond traditional electricity markets. The development strategy would position the company to meet escalating power demands from technology companies establishing operations in Alberta, particularly those driving compute-intensive AI applications.
“We estimate potential development of up to 1,000 megawatts of data centre capacity,” Kousinioris revealed. “The sites we’re evaluating offer immediate interconnection capabilities to the Alberta grid, with available capacity ranging from 150 to 1,000 megawatts.”
Industry analysts view TransAlta’s pivot as strategically sound given Alberta’s emergence as Canada’s data centre frontier. The province’s combination of reliable power infrastructure, cooler climate for natural server cooling, and business-friendly regulatory framework has attracted major technology players seeking to expand their North American footprint.
The company has already secured agreements to provide behind-the-meter power solutions to potential data centre clients, though specifics regarding timelines and investment figures remain under wraps as negotiations continue.
Despite current profit challenges, TransAlta maintains its commitment to shareholder returns, repurchasing approximately 2.4 million common shares at an average price of $8.34 during the second quarter under its normal course issuer bid.
As artificial intelligence continues reshaping global technology infrastructure needs, TransAlta’s bold move into data centre development may represent more than a temporary response to energy market volatility – it could signal the company’s long-term evolution in an increasingly digital economy.
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