AI data centre growth presents an opportunity for Ontario to build the electricity system it needs for the future.
With the right policies, private investment from this emerging industry can help bring new clean power, storage, and grid infrastructure online while supporting a more affordable, reliable, and low emissions electricity system.
The key to realizing this opportunity, and avoiding consequential and costly alternatives, is the development of strategic and coordinated policies that pair Ontario’s evolving electricity needs with a budding new and major industry.
Six recommendations for Ontario:
The province has already taken a positive step toward responsible data centre development, with its data centre playbook offering a promising, though early, example.
The Pembina Institute has submitted six recommendations to the Environmental Registry of Ontario to further inform the development of this strategic framework:
- Align implementation of the proposed data centre playbook with Canada’s Responsible Data Centre Development Principles.
- Consider the emissions impacts resulting from the new electricity required for a data centre when assessing proposals and prioritize data centres that bring new low-emissions electricity supply.
- Establish mechanisms for data centre proponents to directly procure new renewable energy power supply.
- Design the separate rate class for data centres to capture the full costs of data centre connection and operation.
- Require and incentivize data centre demand flexibility to help manage overall rate impacts, increase system reliability and help integrate renewable energy.
- Support communities in evaluating data centre proposals and develop standards to ensure alignment with provincial and community priorities.
