Enbridge (ENB.TO)(ENB) and TC Energy (TRP.TO)(TRP) are spelling out plans to power the physical infrastructure for a data-hungry future. Both companies say their natural gas transmission pipelines will play a central role in generating power for a growing number of data centres.
From online banking, to Instagram and TikTok, data centres process the flow of information using rows upon rows of power-hungry computers. The power needs within a single room can rival a typical residential neighbourhood. By 2026, the International Energy Agency estimates data centres could draw as much electricity as all of Japan.
“Data centres need base load power solutions such as natural gas to support the 24/7 energy demands of hyperscalers,” Enbridge chief executive officer Greg Ebel told investors on a post-earnings conference call on Friday. “You can’t run a full-time economy on part-time power.”
Enbridge became North America’s largest natural gas utility following a trio of acquisitions in the United States last year. The company is also a major supplier of renewable power, which Ebel notes as a priority for the “large blue-chip customers” Enbridge is in talks with.
“I heard a statistic that there are over 250,000 jobs in Ontario tied to AI. In fact, more than in Silicon Valley,” said Michele Harradence, Enbridge’s executive vice-president, and president of gas distribution and storage, said on Friday’s call. “Without question, there are a lot of inbound [inquiries] going on in Ontario about data centre growth.”
On Thursday, TC Energy’s executive vice-president and chief operating officer said data centres are now clustering where energy infrastructure is already in place, rather than prioritizing proximity to telecom infrastructure.
Speaking to analysts on TC’s quarterly conference call, Stan Chapman added that of the more than 300 data centres proposed or under construction in the U.S., 60 per cent are within 80 kilometres of TC’s natural gas system.
“Our best-in-class footprint doesn’t limit the opportunity set just to the U.S.,” Chapman said. “In Canada, there are around 300 data centre operations today. We could see that (power demand) load increasing by one to two gigawatts before the end of the decade.”
This week’s comments by Enbridge and TC executives continue the significant discussion about the energy needs of data centres by Canadian energy companies last quarter.
Beyond conventional utilities, uranium miner Cameco (CCO.TO)(CCJ) and fuel cell-maker Ballard Power Systems (BLDP.TO)(BLDP) have said they are eyeing opportunities from the expected proliferation of data centres in North America.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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