Artificial Intelligence’s affair with renewables

AI and data centers are becoming competitors in Canada for both household consumers and cryptocurrency miners. Some provinces intend to weed out unserious proposals while extracting significant value from credible ones. They can afford to do so because their electricity comes largely from… renewables. At the same time, provincial plans for the AI sector are turning into a political litmus test, signaling who is “in” and who is “out.”

Canadians are still weighing whether AI is a good thing. “At first glance, the country appears divided (…). On closer inspection, it seems people are trying to make sense of something they have not yet fully experienced,” writes David Coletto, head of Abacus Data, a firm that surveyed Canadians in March about their views on data centers.

Attitudes shift markedly when the question turns to support for data centers in one’s immediate vicinity.

“Only 16% would support such developments, 34% would oppose them, while 39% say ‘it depends.’ And it is precisely this ‘it depends’ group – its concerns and its desire to see tangible benefits – that will shape the future,” Coletto emphasizes.

Pointing to the emerging opposition to data centers in the United States, he argues that such projects should be tightly regulated, and that companies – not households – should bear the costs.

AI as a competitor to the ordinary consumer

At the end of January, BC Hydro, the main electricity provider in the province of British Columbia, announced that AI firms and data centers seeking grid connections would be required to participate in a dedicated tender process. The move follows, among other things, amendments to energy regulations that came into force in November 2025.

Quoted in a January statement by the provincial government, Energy Minister Adrian Dix stressed that the province is pursuing long-term economic benefits while safeguarding the quality of supply and price stability for residents.

Asked about the scale of electricity demand from AI companies and data centers – and whether they now constitute the largest group of prospective new customers – BC Hydro said the current queue of connection applications amounts to nearly 6,800 megawatts. Its press office added that these projects span multiple sectors, including LNG, artificial intelligence, and data centers. According to Canada’s market regulator, British Columbia’s generating capacity stood at more than 18,500 MW in 2021 (excluding newly completed plants). In other words, the pipeline of new projects alone represents more than one-third of the province’s existing capacity.

At the end of January, BC Hydro’s chief executive, Charlotte Mitha, warned that without a new application review process, the volume of requests would overwhelm the utility, putting both price levels and supply guarantees for households and other customers at risk. Final decisions are expected in September.

According to estimates by Hydro-Québec, the province of Quebec’s electricity provider, demand from data centers is set to increase sevenfold by 2035, exceeding 1,000 MW.

Tariff reset for AI

In February, Hydro-Québec – backed by relevant provincial regulations – asked the market regulator to approve new tariffs for AI firms. The proposal would make electricity for them more expensive than for existing data centers. Hydro-Québec is also seeking tariff changes for cryptocurrency mining operations.

According to the utility’s statement, the aim is to ensure that “these sectors bear the costs associated with their high electricity consumption, while still benefiting from a price comparable to what is paid elsewhere in North America.”

The Québec provider stresses the need for “responsible management of asset growth, limiting the impact on other customers” in the context of large-scale data-processing users. It cites data compiled by Bloomberg, indicating that “in U.S. jurisdictions where the data-center sector has expanded rapidly, total customer bills have nearly doubled over the past five years.”

Where renewables are in favor – and profits follow

Quebec and British Columbia are far apart geographically, but they are linked by power – more precisely, by its green profile and the fact that, in both provinces, electricity generation and distribution are handled by state-owned companies.

According to Canada’s market regulator, British Columbia’s generating capacity exceeded 18,500 MW in 2021 (of which nearly 16,000 MW came from hydropower), making it the country’s third-largest province by installed capacity. This figure now includes the Site C dam, completed last year, which adds 1,100 MW. Québec, for its part, is Canada’s largest electricity producer, with capacity exceeding 47,000 MW in 2021. Some 94% - almost 41,500 MW – comes from hydroelectric plants.

It is precisely this abundance of renewable energy, particularly hydropower, that is driving rising demand for electricity from the grids of British Columbia and Québec.

The daily La Presse has cited analyses by the Québec government suggesting that demand for renewable electricity from data centers is so strong that operators are willing to pay 15 cents per kilowatt-hour – twice the current price for households.

For its part, Hydro-Québec says that, subject to regulatory approval, all data centers requiring more than 5 MW of capacity will automatically be assigned – starting in the second quarter of this year – to a tariff priced at 13 cents per kWh. At the same time, the utility wants existing data centers to accept gradual price increases over the next five years.

Where renewables are shunned – and costs mount

In Alberta, by contrast, the provincial government is keen to attract data centers – aiming for as much as CAD 100bn in investment (around PLN 300bn; EUR 23bn) – but requires investors to secure their own power supply. The reason is straightforward: the province’s grid cannot cope. By the end of 2025, nearly 40 projects had been put on hold due to a lack of connection capacity.

Part of the strain stems from policy. Since 2024, renewable-energy projects that could have added as much as 15 GW of capacity have been stalled by decisions of Alberta’s conservative government, which is skeptical of renewables. The entire provincial grid currently has about 12 GW at its disposal.

The consequences are already visible. In mid-March, ATCO Ltd., one of Alberta’s largest firms with operations in the energy sector, reported that its solar and wind projects had lost CAD 408m in value (around PLN 1.2bn; EUR 94m), citing provincial policies hostile to renewables. As early as February, the company warned that, unless talks with the government led to change, it might take legal action.

Back in January, The Energy Mix reported that large corporate buyers interested in procuring renewable energy in Alberta were shifting their attention to Nova Scotia, Saskatchewan and Ontario.

The end of the crypto era?

For several years, some provinces have sought to restrict electricity access for cryptocurrency mining operations. Now, amid broader tariff reforms, a clear pattern is emerging.

In Quebec, crypto mining firms are set to face higher electricity prices – up to 19.5 cents per kilowatt-hour from the second quarter (for new entrants). The rationale, according to authorities, is “to reflect the energy intensity of this activity and its limited economic benefits.”

Existing companies will be gradually shifted to higher tariffs over a three-year period. In Québec, data centers currently consume up to 190 MW at peak out of the 200 MW allocated to the sector. The entire sector, according to estimates by Hydro-Québec, is expected to reach 1,000 MW of consumption by 2035. Crypto mining, by contrast, currently uses 115 MW, with “no expected growth in consumption through 2035.”

The reason is structural. Crypto mining firms are increasingly pivoting toward data centers. The Canadian daily The Globe and Mail recently ran a piece titled “The great pivot: Bitcoin miners become AI real estate owners.” Access to the power grid for existing, energy-intensive mining operations is already secured. New capacity allocations are becoming harder to obtain. As a result, many operators are shifting toward a more stable revenue model: data processing for artificial intelligence.

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Energy is politics

AI businesses require not only vast amounts of electricity, but also significant volumes of water for cooling. In Canada, this is increasingly becoming a political issue: Canadians remain strongly attached to their public healthcare system, as well as publicly owned electricity and water utilities. Both Hydro-Québec and BC Hydro, for example, are provincially owned power distributors.

At the same time, the ongoing transformation of the energy market is prompting some conservative circles to revisit the idea of privatizing grids. In March, Benjamin Dachis of the conservative think tank C.D. Howe Institute published a note for municipal utilities. He argued that until electricity demand surged, “everything ran smoothly.” Now, in his view, what is needed is partnership between municipalities and investors “willing to help strengthen our electricity grids,” such as pension funds.

However, the consequences of gradual privatization – such as in healthcare under conservative governments in Alberta and Ontario – are increasingly triggering public protests.

Over the last weekend of March, leadership of Canada’s fourth-largest federal party, the center-left New Democratic Party, was won by Avi Lewis. He ran on a platform advocating an “anti-capitalist movement,” including a wealth tax and… a moratorium on building AI data centers. Even if these ideas are largely attention-grabbing, Lewis captured a broader sentiment among Canadians. AI is not only about electricity supply – it is already a different political story.

Key Takeaways

1. Rising electricity demand from data centers is creating an opportunity for existing cryptocurrency mining operations, which are shifting from “mining” to providing their allocated power capacity to new data centers.
2. Only 16% of Canadians would support building AI data centers near where they live, while 34% would oppose them. A further 39% say it “depends.”
3. 1.5–12 GW — this is the projected range of future electricity demand from AI data centers, according to Canada’s market regulator.