Canadian power company TransAlta has partnered with the Canada Pension Plan Investment Board (CPP Investments) and Brookfield on a potential data center development in Alberta, Canada.

The three companies signed a non-binding Memorandum of Understanding (MoU) to set the framework for the phased development of a data center in Parkland County.

The MoU includes provisions for an initial long-term power purchase agreement for approximately 230MW, as well as an evaluation of potential scaling up to 1GW. While not confirmed, it seems likely that the power will be provided via natural gas. DCD has reached out for further information.

“The Keephills site provides a strategic platform that leverages TransAlta’s large zoned land position, existing transmission, natural gas and water infrastructure, as well as on-site generation to support long-term project scale,” said John Kousinioris, president and CEO of TransAlta. “We are very pleased to be working with CPP Investments and Brookfield and to serve as the exclusive site and power provider for this project. As experienced, global infrastructure investors, CPP Investments and Brookfield have the capability to deliver projects of this size and complexity. We look forward to working together to advance digital infrastructure capacity and unlock future investment in Alberta.”

The development is subject to regulatory approval and the parties reaching binding agreements.

The MoU was announced during the company’s Q4 earnings call. During the call, the company said that data center growth is expected to become a central part of its strategy going forward.

“Over the past few months, we focused on executing our strategic priorities. During the fourth quarter, we secured a definitive tolling agreement to convert Centralia Unit 2 to natural-gas-fired generation under a long-term contract, and today, we announced the signing of a memorandum of understanding for our Alberta data center strategy with Canada Pension Plan Investments and Brookfield,” said Joel Hunter, EVP, finance and CFO, TransAlta.

TransAlta has approximately 9GW of total installed capacity across Canada, the US, and Australia, most of which is gas-fired generation. In 2024, the company reported that it was in talks with major data center operators interested in building sites in Alberta.

Alberta is becoming a hotspot for data center activity due to its temperate climate, available land, and abundant power, although the state has enacted a number of laws to manage the growth. Most recently, a bill was proposed to create a new framework that would allow data center developers to power their installations through offtake agreements with power producers or by generating electricity on-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.