British Columbia Launches Competitive Power Allocation for AI and Data Center Projects

British Columbia Launches Competitive Power Allocation for AI and Data Center Projects February 2, 2026 The Canadian province of British Columbia, in partnership with its primary utility BC Hydro, has initiated a landmark competitive process to allocate its clean electricity to new artificial intelligence and data center projects. This strategic move addresses the dual challenge of managing unprecedented demand growth from power-intensive digital infrastructure while safeguarding the long-term affordability and reliability of the provincial grid. The new framework, established under the Energy Statutes Amendment Act, requires AI and data center developers to submit proposals that will be evaluated based on the economic, community, data sovereignty, and environmental benefits they promise to deliver. The process, which officially opened for applications on January 30, is designed to strategically direct British Columbia's abundant hydropower resources. Notably, traditional industrial sectors such as mining, forestry, liquefied natural gas (LNG), manufacturing, and hydrogen production are excluded from this new competitive channel. “Clean electricity is essential to BC’s economic success, and demand is growing quickly,” said Adrian Dix, Minister of Energy and Climate Solutions. He emphasized that by managing demand carefully and directing power to projects that deliver the greatest long-term benefits, the province aims to foster growth while protecting consumers. The initiative is a key component of the government's "Look West" strategy, which prioritizes projects offering significant economic and environmental returns, with a particular focus on enhancing data sovereignty within Canada. BC Hydro will administer the process, with successful applicants for the initial round to be notified by September 2026. The utility has set an initial target of allocating 400 megawatts (MW) of power capacity over the first two years of the program. This measured approach comes as reports indicate Canada's data center market is poised for exponential growth, leveraging the country's vast land availability and clean energy profile. To maintain stability and confidence for projects already in the development pipeline, the new rules include a grandfathering clause. Any project that has already progressed through BC Hydro's standard interconnection queue—specifically those with signed transmission studies or paid distribution design deposits—will proceed under the existing rules. “Providing clarity for customers already advancing through our interconnection process is essential for maintaining confidence in the system,” stated Charlotte Mitha, President and CEO of BC Hydro. She added that the new competitive process would create a fair and transparent pathway for emerging proponents. The legislation also enacts a permanent ban on new grid connections for cryptocurrency mining operations, further sharpening the focus on high-value digital infrastructure. This policy shift reflects a broader global trend where regions with desirable power attributes are becoming more selective in allocating their finite electrical resources to industries deemed most beneficial for long-term strategic goals. Source: datacenterdynamics