The Canadian province of Alberta has proposed a new bill to incentivize the development of self-powered data centers.

If passed, Bill 8, also known as the Utilities Statutes Amendment Act, 2025, would create a new framework that would allow data center developers to power their installations through offtake agreements with power producers or by generating electricity at the data center site.

In doing so, developers would be provided a fast-track approval option as long as they have secured the requisite environmental, regulatory, and transmission permits before commencing production.

If passed, the amendments to the acts will come into force on various dates. Implementation of the Restructured Energy Market is expected to begin in 2027.

According to government officials, the incentives are designed to reduce strain on the provincial electrical grid while supporting growth across the AI data center sector. The fossil fuel-rich province has been seeking to attract data center customers in recent years, with a stated aim of developing $100 billion worth of data centers over the next five years.

The plans follow the introduction of an interim approach to large load connections announced in June. The approach is expected to enable the connection of up to 1.2GW of new large load projects between now and 2028. The 1.2GW limit is based on the maximum additional load the grid can serve without negatively impacting its overall reliability.

The approach was introduced in response to skyrocketing demand in Alberta's data center sector. In total, approximately 29 data center projects are seeking a grid connection in the province.

The concerns over grid reliability led Alberta Premier Danielle Smith last year to legislate that if data centers wish to set up shop in Alberta, they will need to “bring [their] own electricity, bring [their] own generation," and "partner with a generating company.”

Since then, there has been a proliferation of data center developers seeking to power their operations with on-site generation in the province.

This has taken the form of both small-scale modular deployments, such as Radiant Ridge Energy’s plan to deploy a 3MW natural gas-powered modular hydrocooled data center at a Nordcon gas production site. As well as large-scale plans, such as Crusoe’s agreement with natural gas-fired power provider Kalina Distributed Power to develop multiple colocated AI data centers powered by natural gas power plants in Alberta.

The Canadian data center market as a whole is projected to see exponential growth over the coming years. According to research conducted by DC Byte, the country has a development pipeline of almost 9GW.