Author: Faizan Hajam
The Alberta Electric System Operator (AESO) is facing an unprecedented surge in large load connection applications, primarily driven by AI data centers. As shown in Figure 1, with 29 cumulative requests totaling 16229 MW between Q1 2024 and Q2 2025—far exceeding Alberta’s current peak demand of 12384 MW and the projected 2500 MW of new generation by 2029—the grid cannot accommodate all proposed projects in the short term. Given the unique characteristics of data center loads, including rapid fluctuations and high voltage sensitivities, AESO has launched a phased strategy to ensure grid reliability while enabling responsible development.
Figure 1: Projected new generation, current peak demand, and large load connection requests in AESO
AESO’s Phased Approach to Large Load Integration
To enable large load integration with reliable grid, AESO has come up with a phased, fit-for purpose approach comprising two phases.
Phase 1: Interim Measures Using Current Framework
To support near-term development by 2027/2028, AESO has introduced three key interim measures:
a. Setting the Interim Limit: AESO has established a 1200 MW reliability-based interim limit for new large loads to be connected by 2027/2028. This limit was calculated using a simple, conservative formula:
Connection Limit = 2027/2028 Firm Supply – Supply Derates – Operating Reserves – 2027/2028 Winter Peak
AESO made the following Assumptions:
- Firm Supply: 16700 MW (excluding wind/solar because peaks are often observed during extreme cold winter evenings, which have no or little solar/wind generation)
- Supply Derates: 2000 MW (planned/unplanned reductions in firm supply)
- Operating Reserves: 750 MW
- Winter Peak Load: 12750 MW (excluding new large loads)
Note that this limit may be revised based on material changes in assumptions made during its establishment, such as new generation, intertie reliability, or new market tools.
b. Assigning DTS Capacity: AESO has developed a fair and efficient Limit Assignment Process for allocating the 1200 MW among eligible projects. Projects must meet two criteria to be eligible for participation in this assignment process:
- ≥ 75 MW aggregate load at a single site
- Currently in the “Studies Stage” of the connection process
Figure 2: Limit assignment process
As shown in Figure 2, the limit assignment process includes three steps:
1. Qualify: This step is designated to promote a level-playing field among developers. In this step, developers demonstrate the readiness of their projects and willingness to commit, while confirming a reliable connection.
To Qualify, developers must:
- Provide a letter of support from a municipality or county and Show zoning/permits (approved or on track)
- Submit financial security (~$14M per 100 MW)
- Confirm that the project does not require system reinforcement
2. Assign: This step includes a prorated allocation of the 1200 MW limit. In this step
- Each qualified project developer receives an initial offer based on their share of total qualified MW
- Developers can distribute MWs across their qualified projects
- If area capacity is exceeded, MWs can be proportionally reduced or redistributed
3. Finalize: This step aligns everything with the results of the assignment step to advance projects in the connection process,. It comprises the following activities.
- DTS Security adjustment based on final DTS assignment
- DTS Contract assignment for PD execution with a two-week limit.
- Proposal to proceed with project MW and in-service date.
Figure 3 demonstrates the key timelines of the assignment process in 2025
(Note: Missed deadlines will result in MW reassignment. Timelines may shorten if all assignments are accepted early.)
c. Developing Technical Requirements: AESO is currently drafting technical interconnection requirements. Project managers will coordinate with developers to align schedules and finalize Stage 3 activities.
Phase 2: Long-Term Framework Development
AESO will develop a comprehensive framework for future large load connections, aligned with government policy. This includes:
- New ISO Tariff structures
- Updated Alberta Reliability Standards
- Enhanced transmission planning
- Industry and government engagement
Engagement for Phase II is expected to begin in the second half of 2025. Additional large loads will require new generation or innovative tariff and market tools.
