Mairin Loewen. Program, Director, Urban Climate Leadership Project and former Saskatoon City Councillor: leading practices related to data centre energy planning and upcoming research needs.
Overview of Data Centres and Trends
- Data centres are not new, but AI-driven and hyperscale facilities are far more resource-intensive than older cloud or storage centres.
- AI training facilities are among the most energy-intensive forms of data centres.
- These facilities operate 24/7, require high reliability, and generate significant heat, necessitating extensive cooling systems.
Water Use Impacts
- Cooling accounts for most water use in data centres.
- Two cooling types:
- Facility-level cooling (entire building).
- Server-level cooling (cooling chips directly).
- Data centres are often located in dry regions, as humidity interferes with operations.
- Although Canada does not yet see U.S.-level density, lessons from U.S. experience are highly relevant.
Cooling Systems
- Evaporative cooling: Lower electricity demand, higher water consumption.
- Closed-loop cooling: Lower water use, higher electricity demand.
- Trade-offs between water conservation and energy/emissions impacts must be considered.
Canadian Example
- A recently approved data centre in Etobicoke was permitted to use nearly 40 litres per second of water for cooling.
- Such disclosures are not always required, meaning many approvals occur without public insight into operational demands.
Key Risks
- Municipal water infrastructure upgrades may be required.
- Peak water demand (e.g., during the five hottest days of the year) can strain systems even if annual averages appear manageable.
- Private wells may reduce municipal burden but can negatively affect local aquifers.
- Water return (quality, temperature, destination) is often overlooked but critical.
Energy Use and Grid Impacts
- Data centres are extremely energy-intensive and demand consistent power.
- In the U.S., rapid data centre growth has contributed to utility rate increases exceeding inflation.
- Many grids (including in Canada) are aging and already under strain.
Cost Allocation Issues
- Transmission and grid upgrade costs are often passed to utilities, and ultimately ratepayers, rather than borne by data centre proponents.
- Immediate, localized upgrades may be charged to proponents, but cumulative demand growth often leads to system-wide upgrades funded through the rate base.
- Data centres tend to cluster, compounding long-term affordability impacts.
On-Site Power Generation
- Many data centres build behind-the-meter power generation due to grid constraints.
- Backup power is frequently:
- Natural gas plants
- Diesel generators (sometimes temporary/mobile to avoid regulation)
- Risks include:
- Increased GHG emissions
- Air quality concerns
- Noise and community disruption
Alberta and Ontario Context
Alberta: Bill 8:
- Requires proponents to pay for transmission upgrades (positive).
- Allows broad on-site power generation (problematic).
- Of 22 proposed data centres in Alberta, 15 include natural gas plants.
- Some proposed facilities would double provincial electricity demand in a grid with limited clean energy.
Ontario
- Data centre demand is projected to grow from 2% to ~13% of new electricity demand within 10 years.
- It is unclear whether proponents are required to pay for major future grid upgrades (e.g., new substations).
- Lack of clarity creates risk that infrastructure costs fall to consumers.
- AMO has raised concerns, and regulatory processes may still be evolving.
Zoning, Planning, and Transparency
Key Issues
- Many zoning bylaws and official plans do not distinguish data centres from other commercial or light industrial uses.
- As a result:
- Data centres can be approved without rezoning, public notice, or council scrutiny.
- Approvals may proceed even when councillors are unaware of the proposal.
- Example: A Toronto data centre approved under zoning meant for life sciences, despite vastly different resource demands.
Speculative Development
- Developers may:
- Rezone land for "data centre use"
- Then shop the site to potential operators
- Councils are asked to approve land-use changes without knowing:
- Whether the facility will be hyperscale or low-intensity
- Water, energy, emissions, noise, or job impacts
Employment Reality
- Data centres generate many construction jobs, but very few permanent operational jobs (sometimes ~80 FTEs for massive facilities).
Municipal Tools and Opportunities: Planning & Regulatory Tools
- Explicitly define data centres as a distinct land use.
- Require disclosures on:
- Annual and peak water use
- Energy demand
- Cooling systems
- On-site power generation
- Noise and emissions
- Consider:
- Conditional permitted uses
- Discretionary uses (greater transparency and oversight)
- Business licensing requirements tied to water and energy reporting
- Use site plan agreements to retain leverage, but recognize their limits.
Infrastructure Protection
- Ensure proponents-not municipalities or residents-pay for:
- Water system upgrades
- Wastewater system upgrades
- Transmission and distribution infrastructure
- Assess impacts on:
- Fire flow capacity
- Future industrial and residential growth
Potential Benefits if Managed Proactively
- Data centres do not have to be bad neighbors.
- International examples:
- Stockholm: Waste heat reused for district energy.
- Germany: Renewable energy requirements for data centres.
- Canadian example:
- A data centre in Markham co-located to supply waste heat to the district energy system, reducing fossil fuel use.
- Benefits require intentional negotiation and are unlikely to be offered unless requested.
Federal Policy and Advocacy Considerations
- Federal AI and grid strategies have largely overlooked local governments.
- Risk that sovereign AI development:
- Locks in high-emissions infrastructure
- Prioritizes speed over sustainability
- Advocacy opportunities:
- Tie federal subsidies for AI and data centres to:
- Clean grids
- Renewable on-site backup
- Strong environmental performance
- "Sovereign AI" and clean energy must go together.
Urban Climate Leadership (UCL) Updates
- Hosting ongoing dialogues on data centres and local government impacts.
- A new report summarizing recent dialogue was released (link shared in chat).
- Upcoming dialogue scheduled for April 30.
- Municipal participation is encouraged.
UCL aims to convene knowledge, not act as sole content experts.