Prime Highlights

• Ontario will bring in new rules allowing utilities to restrict electricity supply to inefficient data centres.
• The move is aimed at reserving electricity capacity for critical industries and clean energy projects.

Key Fact

• Data centres are now subject to energy-efficiency standards in order to get or maintain grid connections.
• The policy shift comes as growing alarm is raised about rapid-growing electricity consumption by digital infrastructure.

Key Background

The Ontario government is taking a bold step to control the province’s rapidly expanding data centre sector, which is marked by its massive power appetite. Energy Minister Stephen Lecce, speaking in Kitchener, announced legislation in the works that will permit local utilities to provide priority access to the grid for high-efficiency data centres.

Currently, electricity providers are already obligated to provide a connection to any new customer, including data centres. The new rule modifications will change that model so that utility businesses are able to delay or deny the grid access for expanding or new data centres that do not demonstrate energy responsibility. The initiative is a direct response to growing concern for the explosive growth in electricity usage generated by hyperscale and cloud computing data centres.

Lecce discussed how Ontario’s clean energy advantage needs to be protected. The province, which relies heavily on hydro and nuclear power, risks overloading its grid if digital infrastructure of the big-server kind expands unabated. Closing the loop on controls, the government wishes to ensure electricity continues to be available for building homes, producing goods, and building electric vehicles—pillars of Ontario’s economy and climate goals.

The legislation will also have standards in the form of Power Usage Effectiveness (PUE), server usage, usage of waste heat recovery methods, and use of renewable resources. These are intended to encourage industry to more energy-efficient use. The standards themselves have not been defined yet, but the direction of the policy leaves very little doubt that Ontario is not willing to compromise energy sustainability for unbridled data growth.

This bold move positions Ontario at the forefront of jurisdictions that strike a balance between technological advancement and environmental protection. The government plans to introduce the bill in the current year, marking a dramatic shift towards the regulation of digital infrastructure across the province.

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