B.C. Energy Minister, pictured in Vancouver in July, introduced Bill 31 on Monday, which seeks to change the rules around industrial electricity delivery.ETHAN CAIRNS/The Canadian Press
British Columbia intends to curb the growth of data centres, including those used for artificial intelligence, giving priority instead to natural-resource development projects competing for a limited supply of electricity.
A proposed law, introduced Monday, would free the Crown-owned utility BC Hydro from the obligation to supply electricity equally to all industrial customers. It would also ban cryptocurrency mining – another sector with large electricity demands.
BC Hydro has for decades provided an abundant supply of cheap hydroelectricity that has helped shape the province’s economic development. With industrial demand set to spike in the next decade, however, it is now shifting to a model of allocation.
AI and data centres are energy-intensive, and the B.C. government is sending a signal to investors in the mining industry and other natural-resource sectors that their projects will take priority.
The new policy runs counter to a global rush to invest in AI infrastructure. Prime Minister Mark Carney has tasked his new Major Projects Office with developing “sovereign” cloud-computing resources to secure the independence of Canada’s advanced-computing sector.
New B.C. legislation promises power line to unlock northern development
Closer to B.C., Alberta is aiming to have $100-billion worth of AI data centres under construction within the next five years. The proposed centres to date are requesting power equivalent to Alberta’s total current consumption.
The B.C. government, meanwhile, is pinning its economic hopes on landing $50-billion worth of private-sector investments in mining in the northwest corner of the province alone.
At a news conference Monday, Premier David Eby called the promise of those projects “incredible,” adding, “Right now, outdated rules make it too difficult and too costly for major projects to get to that final investment decision, and make that decision to build and employ people and build our prosperity.” The changes proposed in Bill 31, the Energy Statutes Amendments Act, are meant to clear those hurdles away.
Energy and Climate Solutions Minister Adrian Dix said the decision to limit growth of the AI industry will “avoid the mistakes of other jurisdictions” where consumers are now facing higher electricity costs because of the pressure placed on the grid.
He pointed to two U.S. states – New Jersey and Virginia – that successfully courted the tech sector to secure massive data centres, and are now passing along higher utility costs to residents as a result.
Existing law requires BC Hydro to serve any customer within its coverage area who requests and can receive service, which is provided on a first-come, first-served basis.
The Decibel: AI and digital sovereignty in the elbows-up era
Under the new allocation system, it would assess new industrial customers based on criteria such as their contribution to the provincial economy.
Despite the completion of the Site C megadam and a recent move by BC Hydro to purchase private power, there will not be enough electricity to accommodate all new requests.
Under the proposed law, new natural-resource and manufacturing projects would not be restricted, and the industrial rate for electricity is not set to change. However, starting next year, the province will open up bidding for artificial-intelligence and other data centres, with a total cap of 400 megawatts over a two-year period. Prices will be set by regulation.
Bill 31 will also enable construction of the $6-billion North Coast Transmission Line, which is meant to secure new private-sector investments, including a string of critical-mineral mines, for the province’s sparsely developed northwest corner. BC Hydro is seeking to build the NCTL with First Nations equity partnerships, and B.C. is also pressing Ottawa to help fund the project as a “nation-building” initiative.
Mr. Eby said his government can’t control whether the proposed developments will be built, but it needs to fast-track the infrastructure to ensure they can move forward.
“We are making the decision as a government that this is in the public interest,” Mr. Eby said. “This will lift communities out of poverty. This will create almost 10,000 jobs. This is like a big revenue machine – it just needs to be plugged in, so we’re building the plug.”
Data centres are popping up everywhere, but a jobs boom is unlikely
There are 14 projects currently lined up to tap into the new transmission line, including mines, liquefied natural gas plants, and an expansion of the Port of Prince Rupert. The first stage of the NCTL route runs from Prince George to Terrace, with additional spurs under consideration.
Michael Goehring, president and chief executive of the Mining Association of BC, said the project is low-risk because there is huge demand for the critical minerals and precious metals that his members want to develop in the province’s northwest and central Interior.
“This line, in our industry’s view, is a strategic and safe bet,” Mr. Goehring told the news conference.
Canada is seeking to join a global critical-minerals revolution by developing mining for copper, nickel, lithium, graphite and cobalt needed for renewable-energy projects and electric vehicles.
Ottawa has identified 34 minerals and metals as critical to the country’s economic or national security. B.C. has 19 of those minerals and metals in the ground.
A coalition of environmentalists denounced the decision to fast-track the NCTL, however, saying it amounts to a fossil-fuel subsidy because it will help develop new LNG plants.
“By wiring up polluters, the province is locking us into decades of fossil fuel expansion under the greenwashed banner of electrification,” Isabel Siu-Zmuidzinas, climate co-ordinator for the Wilderness Committee, said in a statement.