Capital Power Strikes Major 250MW Power Deal for Alberta Data Center Hub
December 12, 2025
As the global surge in artificial intelligence and cloud computing places unprecedented demands on power grids, securing reliable, large-scale electricity has become a critical bottleneck for data center expansion. This dynamic is reshaping energy markets and forging new alliances between power producers and digital infrastructure developers.
In a significant move addressing this need, Canadian independent power producer Capital Power has entered into a binding Memorandum of Understanding (MoU) with an undisclosed data center developer in Alberta. The agreement sets the stage for a long-term power supply deal for up to 250 megawatts (MW) of electricity, with deliveries expected to commence in 2028.
The substantial capacity is likely to be sourced from Capital Power's 1.8-gigawatt (GW) natural gas-fired Genesee Generating Station, located approximately 71 kilometers southwest of Edmonton. The deal underscores the strategic importance of Alberta's energy assets for power-intensive industries. Capital Power's CEO, Avik Dey, highlighted the structural shift, stating, "Now more than ever, we see an opportunity to grow our business as a result of structural growth in power demand driven by the AI infrastructure boom and the growing need for reliable and affordable energy."
This transaction occurs alongside another major strategic play by Capital Power: a separate $3 billion US investment partnership formed with Apollo Funds to acquire merchant natural gas power assets across the United States, with Apollo committing $2.25 billion in equity.
The 250MW agreement is a key indicator of Alberta's rapid emergence as a North American data center hub, fueled by its available land and abundant natural gas reserves. Provincial grid operator AESO has reported that approximately 29 data center projects are currently seeking grid connections. In response to this influx, the Alberta government recently introduced legislation to incentivize self-powered developments, following an interim plan launched in June 2024 designed to connect up to 1.2GW of new large-load projects by 2028 without compromising grid reliability.
This policy environment has catalyzed a wave of projects aiming to colocate data centers with on-site generation, ranging from small modular deployments to large-scale plans like Crusoe Energy's partnership with Kalina Distributed Power. Capital Power's 250MW deal represents one of the largest single power procurement agreements announced in the region to date, signaling both the scale of incoming investment and the evolving model of direct partnerships between energy generators and data center operators.
Source: datacenterdynamics
Capital Power Strikes Major 250MW Power Deal for Alberta Data Center Hub
