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Power Surge: Energizing Canada’s Data Centre Expansion

February 11, 2026 5 Minute Read

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Ever stopped to think about the physical infrastructure that makes the Internet work?

Behind every search, every video streamed, every artificial intelligence (AI)-powered interaction, and every online transaction, lies a network of data centres.

Canada is home to over 300 of these facilities and the energy needed to power them is monumental.

The Canadian data centre market was valued at $10.4 billion in 2024 and is expected to reach $16.8 billion by 2030, fueled by soaring demand for cloud services, data storage and AI.

This rapid expansion is dependent upon access to electricity. “The data centre industry is expanding at an unprecedented pace, powered by the explosive growth of the digital economy and rapid growth in the application of AI,” says CBRE Global Energy & Sustainability Director Martin Reed.

“Effective planning for utilities is critical in today’s market due to the scale of power and water that a data center requires. Working collaboratively with utility providers, grid operators and suppliers is imperative to establish an efficient, resilient and operationally sustainable facility.

“It’s incredibly difficult to predict how much power will be required for data centres moving forward as there are so many variables, not least the impact of AI and high-performance compute which are intermittent in nature.”

Canada’s affordable electricity, abundant energy sources and cool climate make it an appealing destination for data centre developers looking to expand internationally. But the country’s power grid could reach a breaking point if demand continues to surge.

Sustainable Solutions

“Power consumption for data centres is going through the roof,” says CBRE Vice President Scott Harper.

Globally, data centres consumed an estimated 460 terawatt-hours in 2022 – roughly equivalent to 71% of Canada’s total electricity generation that same year, according to the International Energy Agency.

Efforts are underway to improve energy efficiency, lower operating costs and reduce the environmental impacts of data centres. Transitioning to renewable resources is one option to enable decarbonization of the grid.  

“But there’s fierce competition there,” notes Reed. “100% renewable transition is big, and it also means that you’ve got lots of people vying for the same sources of power.”

Robust Monitoring

Though there’s no silver bullet to achieve data centre sustainability, developers are taking certain steps to ensure success.

Managing energy use starts with being able to measure it. Tracking key performance indicators such as power, carbon and water use can vastly improve an organization’s ability to optimize data centre operations and reduce environmental impacts.

“We’ve been seeing mandatory energy efficiency targets becoming more comprehensive in the last 18 months,” says Reed. “In Europe the EU Energy Efficiency Directive has driven transparency and common performance metrics to be reported, such as energy and water use, power effectiveness and power utilization.”

“The aim of this legislation is to increase transparency and incentivize efficient operation. After all, the cheapest and cleanest energy is the energy that is not used at all.”

Most data centre operators in North America are not prioritizing the environmental impacts of their facilities, according to Natural Resources Canada.“Everybody’s thinking about how to get power,” says Harper. “How to manage it efficiently always comes later.”

Efficient Cooling Technologies

Data centres produce a lot of heat. Cooling systems that remove the heat from data halls account for approximately 40% of data centre power consumption. “Imagine having your stove on, it’s at that level at all times and having fifty of them in your home,” says Harper.

A significant amount of water is required for cooling, with medium-sized data centres consuming roughly 110 million gallons a year for cooling purposes. That’s equivalent to the water consumption of approximately 1,000 homes.

Water management techniques such as closed-loop cooling systems can reduce freshwater use by up to 70%, while methods like free cooling can avoid water altogether, using cold air instead. The rapid rise in processor power from AI is pushing data centre rack densities beyond what air cooling can handle, making liquid cooling essential to improve energy efficiency.

Local climate, the cost and availability of power, and localized water stress are all important aspects to consider when picking the best cooling method, as is strategizing on how to draw from a variety of sources.

“Planning for multiple sources of power or water is the best strategic position for the future, as it embeds resiliency and gives operators more options when faced with the market dynamics to be more in control of the direction they want to take,” says Reed.

Living On the Edge

Nearly half of Canada’s existing data centres are hyperscalers – huge cloud service providers run by the tech industry’s biggest players. But a newer, smaller type of facility is gaining a foothold in the market: the edge data centre.

Edge data centres are small, decentralized facilities located close to end-users and devices used to reduce latency. These facilities process time-sensitive data locally, sending less critical information to larger, centralized data centres for heavy-duty analytics.

“By placing compute closer to users, edge facilities minimize latency and enable faster, more resilient digital services,” says Reed.

“When deployed in secondary markets with less-constrained power grids, they can complement hyperscale facilities while materially reducing environmental and community impacts. As AI drives unprecedented growth, the challenge for our industry is not just scaling capacity—but doing so responsibly.”

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