Why Alberta: Stranded Power, Open Markets & The Case for Modular Compute

• Few jurisdictions have what Alberta offers. Persistently discounted natural gas, a deregulated power market with new legislation that rewards self-generation, and a grid connection queue so oversubscribed that behind-the-meter generation is the fastest path to energized compute.

• The deepest advantage favors early movers. LNG export capacity now ramping on the west coast is expected to lift Western Canadian gas prices through the decade. Operators who secure energy-advantaged sites before that discount narrows capture a spread that later entrants will not.

• AVAX One’s first Alberta project, a 10 MW behind-the-meter AI/HPC site, is an early expression of this thesis.

The AI bottleneck has moved from chips to power

For the first phase of the AI buildout, the core constraint was silicon, but that’s no longer the only obstacle. Another major constraint is electricity, and the clearest evidence sits in grid interconnection queues. In Texas, grid operator ERCOT reported 226 gigawatts of large-load interconnection requests as of November 2025, against an all-time peak demand of 85.5 gigawatts.¹ Most of that requested load will never be built. The resulting queue is where projects often end up waiting (and, potentially, dying on the vine).

That reality changes how to assess which jurisdictions are most suited to support growing data center demand. Compute operators aren’t only asking where land and fiber is cheapest. They are also looking for a place where a project can reach energization without standing in line. 

Alberta has become one of the most credible solutions for three primary reasons, all of which reinforce AVAX One’s decision to build in the region.

Alberta’s gas is cheaper, in part because it is trapped

The first reason is the low price of energy. The AECO-C benchmark, the reference price for Western Canadian natural gas, averaged roughly C$1.45 per gigajoule in 2024, a 47% decline from the prior year. The Alberta Energy Regulator attributes the drop to regional oversupply and limited pipeline capacity out of the basin; some producers curtailed output and deferred drilling because prices did not justify production.²

For a gas producer, trapped supply is a problem. For a compute operator, it represents an opportunity. Gas that cannot economically leave the basin can still generate power exactly where it sits (and at a discount). Alberta’s climate gives the region another advantage. Cold ambient temperatures reduce cooling loads for much of the year, making it an even more economically advantageous region for compute investment.³

The only market that explicitly tells you to bring your own power

The second reason is policy. Alberta operates the only deregulated, energy-only electricity market in Canada (meaning generators earn revenue only from the electricity they actually sell, not from being kept on standby, which ties prices closely to real-time supply and demand).”

Regulators have been explicit that data centers seeking scale should arrive with their own generation. In practice this usually means building on-site or adjacent power plants (most often gas turbines given Alberta’s cheap natural gas, and sometimes paired with solar, wind, or batteries). This is often called “behind the meter” generation, because the electricity flows straight from the plant to the load without passing through the grid’s metered connection point.

In December 2025, that preference for behind-the-meter generation became statute. Bill 8, the Utilities Statutes Amendment Act, received Royal Assent on December 11, 2025. It directs the grid operator to prioritize data center projects that self-supply power and requires proponents, not ratepayers, to fund any transmission upgrades their connections require.⁴ A companion bill established a levy framework for large grid-connected data centers, from which off-grid projects are exempt.⁵

Most jurisdictions just tolerate behind-the-meter generation. Projects in those regions carry the risk that a utility or regulator contests the model after capital is committed. The cautionary example sits in Pennsylvania, where federal regulators rejected an expanded co-location arrangement between an Amazon data center and the Susquehanna nuclear plant in late 2024, citing grid reliability and ratepayer concerns, then upheld that rejection on rehearing.¹², ¹³

In contrast, Alberta’s legislation rewards behind-the-meter generation. It gives priority treatment for self-supplied projects that build their own on-site generation instead of drawing their power from the public grid. That explicit approval reduces regulatory risk (plus, the levy structure shifts costs onto grid-dependent facilities while leaving off-grid operators untouched).⁶

The province’s stated ambition is to attract up to $100 billion in AI data center investment over five years. Its pitch rests on the combination of abundant gas, the freedom to self-generate, and speed. ³, ⁶

The framework is also built to keep that welcome durable. In the United States, local opposition blocked or delayed an estimated $156 billion across 48 data center projects in 2025 alone, much of it driven by concern that grid-connected loads push costs onto residential ratepayers.¹⁴ Because Alberta’s model makes developers fund their own generation and transmission, it removes the grievance now slowing projects elsewhere.

The queue creates the opportunity

Alberta’s public grid cannot absorb the demand from projects now seeking connection. As of February 2026, 42 large-load projects were requesting a combined 21.1 gigawatts from the provincial grid, nearly twice Alberta’s entire peak load. Against that demand, the grid operator AESO set an interim connection limit of 1,200 megawatts for projects targeting service in 2027 and 2028.⁷

Grid access has become a traded asset as a result. One company that secured a 180 megawatt allocation in last year’s allotment process subsequently sold it for $18 million.⁷

Behind-the-meter generation bypasses the queue entirely. A facility powered by on-site gas generation is self-supplied and does not compete for the same 1,200 megawatts on the public grid, allowing it to skip the queue and the high cost of implementation on it.

Why small, modular compute centers benefit in the basin 

Alberta’s gas production is not concentrated in a handful of giant fields. It is distributed across many smaller production sites, and many of these sites are privately owned. Its geography and policy frameworks do not suit a single gigawatt campus dropped onto one parcel, but instead favor a network of modular facilities, each co-located with the generation that powers it and sized to the gas and infrastructure available at its site.

Other operators are reaching the same conclusion. Radiant Ridge Energy has planned a 3 MW modular, gas-powered data center at a producing gas site, and Crusoe has agreed to develop multiple co-located AI data centers in Alberta with gas-fired power provider Kalina Distributed Power.8 At the larger end, Pembina Pipeline and partner Kineticor expect a final investment decision by the end of June on a proposed 900 MW gas-fired generation facility serving a planned data center customer.3 Canada’s total data center development pipeline now approaches 9 gigawatts.⁸

The modular format also matches where many in the industry expect demand to broaden: smaller, regionally distributed facilities serving inference and latency-sensitive workloads, rather than the centralized training campuses that dominate headlines.

Where AVAX One fits

This thesis is the foundation of AVAX One’s first Alberta project, a 10 MW Tier 3-ready AI/HPC facility built on a fully behind-the-meter natural gas generation model with battery energy storage integration.

Some key recent milestones include:

• April 7, 2026: Signed a front-end engineering and design (FEED) proposal with BlueFlare Energy Solutions for a 10 MW AI/HPC micro-grid at the 4-31 Battery site, which offers behind-the-meter natural gas-to-power capability, proximity to 138 kV transmission, redundant fiber connectivity, and logistics access via Highway 36. The FEED study requires no upfront capital from the Company.⁹
• April 30, 2026: Confirmed the fully behind-the-meter natural gas infrastructure model and disclosed an expanded Western Canada site pipeline of 5 to 50+ MW opportunities under evaluation.¹⁰
• May 6, 2026: Selected ASCENT Consulting as Owner’s Engineer, advancing the project from conceptual design into detailed engineering and AESO-ready deliverables.¹¹

REFERENCES

1. ERCOT large-load interconnection queue reporting, as analyzed in “Inside Texas’s AI Data Center Queue,” January 2026. https://davefriedman.substack.com/p/inside-texass-ai-data-center-queue
2. Alberta Energy Regulator, ST98 Alberta Energy Outlook: AECO-C Price (accessed June 10, 2026). https://www.aer.ca/data-and-performance-reports/statistical-reports/alberta-energy-outlook-st98/prices-and-capital-expenditure/natural-gas-prices/aeco-c-price
3. BNN Bloomberg, “Alberta pitches cheap natural gas for data centre boom,” June 9, 2026. https://www.bnnbloomberg.ca/investing/commodities/2026/06/09/alberta-pitches-cheap-natural-gas-for-data-centre-boom-at-odds-with-canadas-clean-power-aims/
4. Government of Alberta, “Powering new pathways for data centres” (Utilities Statutes Amendment Act, 2025; Royal Assent December 11, 2025). https://www.alberta.ca/powering-new-pathways-for-data-centres
5. Bennett Jones, “Alberta Advances Regulatory Changes to Facilitate Data Centre Development,” January 2026. https://www.bennettjones.com/Insights/Blogs/Alberta-Advances-Regulatory-Changes-to-Facilitate-Data-Centre-Development
6. University of Calgary, Office of Institutional Commitments, “Will AI Data Centres Raise Water and Power Use in Alberta?” May 2026. https://ucalgary.ca/sustainability/mobilizing-alberta/climate-action-blogs/will-ai-data-centres-raise-water-and-power-use-alberta
7. CBC News, “Is power for AI data centres a new commodity? One company sold its AESO allotment for $18M,” February 17, 2026. https://www.cbc.ca/news/canada/calgary/albertas-ai-data-centre-boom-unleashes-gold-rush-for-electricity-allotments-9.7089179
8. Data Center Dynamics, “Alberta gov’t proposes bill to incentivize self-powered data center developments,” February 2026. https://www.datacenterdynamics.com/en/news/alberta-govt-proposes-bill-to-incentivize-self-powered-data-center-developments/
9. AVAX One Technology Ltd., “AVAX One Technology Announces Strategic Initiative to Develop 10MW AI/HPC Micro-Grid Data Center in Alberta,” April 7, 2026. https://avax-one.com/news/
10. AVAX One Technology Ltd., “AVAX One Advances Alberta AI/HPC Powered Land Program; Confirms Behind-the-Meter Natural Gas Infrastructure Model and Expanded Site Pipeline,” April 30, 2026. https://www.globenewswire.com/news-release/2026/04/30/3284859/0/en/avax-one-advances-alberta-ai-hpc-powered-land-program-confirms-behind-the-meter-natural-gas-infrastructure-model-and-expanded-site-pipeline.html
11. AVAX One Technology Ltd., “AVAX One Selects ASCENT Consulting as Owner’s Engineer To Advance Behind-the-Meter Critical Power Facility in Alberta,” May 6, 2026. https://www.globenewswire.com/news-release/2026/05/06/3288777/0/en/avax-one-selects-ascent-consulting-as-owner-s-engineer-to-advance-behind-the-meter-critical-power-facility-in-alberta.html
12. Utility Dive, “FERC rejects interconnection pact for Talen-Amazon data center deal at nuclear plant,” November 4, 2024. https://www.utilitydive.com/news/ferc-interconnection-isa-talen-amazon-data-center-susquehanna-exelon/731841/
13. Data Center Dynamics, “FERC upholds rejection of proposed interconnection agreement between AWS data center and Pennsylvania nuclear plant,” March 2026. https://www.datacenterdynamics.com/en/news/ferc-upholds-rejection-of-proposed-interconnection-agreement-between-aws-data-center-and-pennsylvania-nuclear-plant/
14. The New York Times, “Local Opposition Is Slowing A.I. Data Centers. Wall Street Has Noticed.” March 26, 2026. https://www.nytimes.com/2026/03/26/business/economy/ai-data-centers-construction-local-opposition.html

ABOUT AVAX ONE

AVAX One Technology Ltd. (NASDAQ: AVX) is the first publicly traded Avalanche Treasury company, building the premier institutional gateway to the onchain financial economy powered by the Avalanche blockchain network. Through AVAX accumulation, onchain yield, and strategic acquisitions, alongside the development of power-first, modular data center infrastructure in energy-advantaged regions, the Company aims to compound long-term value for its shareholders while supporting the growth of the Avalanche ecosystem. For more information, visit www.avax-one.com.

THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT ADVICE OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. THIS ARTICLE CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS REGARDING THE DEVELOPMENT OF DATA CENTER INFRASTRUCTURE, PROJECT TIMELINES, AND MARKET CONDITIONS, WHICH ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS. DIGITAL ASSET PRICES ARE HIGHLY VOLATILE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.