The Alberta Utilities Commission has rejected Synapse Real Estate Corp.’s application to construct a natural gas power plant to power a large proposed AI data centre campus in the small town of Olds, Alta.
Synapse had proposed a 10-building artificial intelligence (AI) data centre campus with 1.4 gigawatts of onsite natural gas power, as well as 1.8 gigawatts of diesel power for emergency use and backup. However, in its Aug. 17 rejection, the Alberta Utilities Commission (AUC) said the site for the natural gas plant was not “suitable.”
“The project is too close to the surrounding community, and Synapse failed to demonstrate any compelling justification for selecting that location,” the commission wrote, adding that “the site is simply not suitable for the proposed development.”
Opposition
The project has drawn significant opposition from residents in Olds, a town of roughly 10,000 located approximately 80 kilometres north of Calgary. These have included concerns over emissions, noise pollution, environmental impact, pressure on local healthcare and emergency services, and health effects.
The AUC said approximately 1,500 parties applied as intervenors, of whom more than 900 were granted standing, whereas a typical hearing would bring in only a few hundred applicants.
Officials in Olds had said the AI data centre development would bring in significant tax revenue and new jobs but said it respects the AUC’s decision.
The AUC’s decision blocks the Synapse project from proceeding as currently proposed, although the company could pursue a redesigned project or a different location.
Alberta
Alberta has been encouraging the construction of AI data centres in the province. It passed legislation in December 2025 that incentivizes companies to supply their own power and requires them, rather than Alberta ratepayers, to cover the cost of transmission upgrades needed for their projects.
Data centres are buildings that house servers and other computer equipment used to store and process information, while AI data centres use particularly powerful computer systems to train and operate AI models and require especially large amounts of electricity.
The AUC is responsible for issuing decisions on whether proposed projects align with the public interest in terms of their use of power infrastructure, while decisions on land use and zoning remain the purview of municipalities.
Other Projects
In addition to the proposal in Olds, Facebook and Instagram’s parent company Meta broke ground last month on a $13 billion AI data centre campus in Sturgeon County, north of Edmonton.
The project is slated to eventually get power from a nearby natural gas-fired power plant being developed by Pembina Pipeline Corp., Morgan Stanley Infrastructure Partners, and Kineticor Asset Management.
However, it has also drawn opposition, with hundreds of opponents of the project gathering outside county offices earlier this month in protest.
Rocky View County, bordering Calgary, voted last month to temporarily stop its consideration of all new data centre proposals amid growing local concerns about such developments, while municipal officials say they will develop clearer rules for the projects going forward.
For its part, the Alberta government has announced a number of upcoming town hall meetings in order to hear views from the public about data centre development.
