N.B. Power seeks flexible arrangements from data centres to manage electricity demand amid gas plant controversy
N.B. Power has expressed that it is not overly concerned about the electricity demands of a proposed data centre in Lorneville, Saint John. However, the utility confirms its intention to seek flexibility from such facilities regarding their power consumption. Senior executive Brad Coady, the utility’s chief commercial officer, clarified that there is no correlation between the proposed 400-megawatt natural gas plant slated for construction in Tantramar and the data centre, which is expected to require 190 megawatts.
Coady emphasized that considerations for the gas plant had been underway long before the recent discussions concerning the data centres gained traction. Megan Mitton, a Green Party MLA from Tantramar, has alleged a connection between N.B. Power’s gas plant proposal by U.S.-based ProEnergy and the data centre, developed through a partnership between two American companies, VoltaGrid and Beacon AI. Mitton has suggested that the increasing electricity needs could be influencing N.B. Power’s strategy in selecting companies to build the gas plant by 2028.
The data centre aims to support various operations, including artificial intelligence services and applications, by utilizing 190 megawatts from its own on-site natural gas generation alongside an additional 190 megawatts sourced from N.B. Power. This amount is roughly half of what the utility would derive from the proposed gas facility.
N.B. Power announced the need for the gas plant to prevent potential electricity shortages projected for the next three years due to population and economic growth. Utility officials reported that they narrowly met last winter’s peak electricity demand, presenting a picture of urgency regarding energy provision.
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Coady noted that while demand forecasts are modest—expecting stable growth of less than one percent annually—the utility will seek agreements with data centres that would facilitate operations during peak demand, potentially by shutting down or relying solely on their on-site generation or battery systems. He affirmed the utility’s aim to explore flexible arrangements that accommodate growth while ensuring a stable electricity supply for New Brunswick.
Nathan Ough, CEO of VoltaGrid, argued that data centres should not be viewed merely as large energy consumers; instead, he highlighted their capability to contribute to the grid during peak demand periods through electricity generation. Coady agreed that this symbiotic scenario is feasible but would require careful coordination.
Green Party Leader David Coon raised concerns about the discrepancy between N.B. Power’s low demand growth forecast and its justification for the gas plant, questioning the rationale that the facility is critically needed by 2028 to prevent outages. He proposed a revised approval process for new data centres that would accurately assess their electricity consumption, independent of the New Brunswick Energy and Utilities Board’s industrial power rate settings.
A recent report from the North American Electrical Reliability Corporation revealed that the Maritimes are at risk of an electricity shortfall, citing the region’s inadequate reserve margin to meet peak demands in severe weather conditions. While the report notes a slight decrease in expected peak demand for the upcoming winter, the overall electricity supply situation remains precarious.
Under the Electricity Act, N.B. Power is mandated to provide power to all industrial facilities in the province. However, past legislation exempted crypto mines from this requirement due to their high consumption levels, with no such exemption currently under consideration for data centres.
Coady remarked that the recent surge in crypto mining had raised alarms for N.B. Power, noting the transitory nature of such operations and their potential for burdening the utility with excessive costs for power generation infrastructure. He emphasized that unlike crypto enterprises, data centres present a more stable investment opportunity, offering the potential to distribute costs across additional kilowatt hours, thus alleviating financial pressure on electricity rates for all consumers.
Ough concluded that should the data centre presence create issues for overall electricity supply, N.B. Power would reserve the right to refuse service to the facility. The ongoing discussions reflect the complex interplay between energy needs, infrastructure planning, and economic development in New Brunswick.
