KALINA’s CAD$1 Billion Power-CCS Plants to Fuel Crusoe’s AI Data Centres
KALINA Power has partnered with Crusoe to develop multiple AI data centres co-located with near-zero emissions natural gas power plants in Alberta, promising stable cash flows and sustainable energy solutions.
- Framework Agreement for joint development of AI data centres with near-zero emissions power
- Power-CCS plants to supply affordable power under long-term PPAs of at least 15 years
- Initial focus on three Alberta sites: Myers, Alsike, and Crossfield Energy Parks
- Each 170 MW Power-CCS plant involves ~CAD$1 billion gross capex, net CAD$640 million after incentives
- Potential expansion includes virtual power purchase agreements and additional project sites
Strategic Partnership for Sustainable AI Infrastructure
KALINA Power Limited (ASX: KPO) has announced a significant Framework Agreement with Crusoe, a leader in AI data centre operations, to jointly develop multiple co-sited AI data centres powered by KALINA’s near-zero emissions natural gas-fired power plants equipped with carbon capture and sequestration (Power-CCS) technology in Alberta, Canada.
This collaboration aims to leverage Alberta’s unique infrastructure advantages, proximity to electrical transmission, gas pipelines, fibre optic networks, and carbon sequestration hubs, to establish a scalable and sustainable AI data centre footprint. The agreement outlines a commercial model where Crusoe will own and operate the AI data centres, contracting power from KALINA’s Power-CCS plants under long-term power purchase agreements (PPAs) of at least 15 years with investment-grade or creditworthy counterparties, ensuring stable and predictable cash flows for KALINA.
Capital Intensity and Project Scope
Each Power-CCS plant is a substantial investment, with a gross unlevered capital expenditure of approximately CAD$1 billion, reduced to around CAD$640 million net of cash rebate incentives. The initial development phase focuses on three strategically located sites: Myers Energy Park, Alsike Energy Park, and the newly secured Crossfield Energy Park. Environmental and biophysical studies have been completed or are underway, and KALINA has already filed self-supply and export System Access Service Requests with the Alberta Electric System Operator for these locations.
Beyond these initial projects, the Framework Agreement provides flexibility for Crusoe to contract power via virtual power purchase agreements (VPPAs) from other KALINA projects such as Gilby Power Park and a new Clairmont area site, which are more suited to virtual contracting models rather than co-sited arrangements.
Market Opportunity and Strategic Vision
Ross MacLachlan, Managing Director of KALINA, emphasized the strategic importance of this partnership, highlighting the alignment of market demand for AI data centres with Alberta’s energy landscape. He noted that the agreement not only sets the stage for up to three initial projects but also opens the door for future expansions and joint developments at additional sites.
By combining KALINA’s near-zero emissions natural gas power plants with Crusoe’s AI data centre expertise, the partnership aims to deliver reliable, affordable, and environmentally responsible power solutions that meet Alberta’s self-supply requirements and support the growing AI sector’s energy needs.
Financial and Operational Implications
The long-term PPAs underpinning the projects are critical to securing financing for the capital-intensive Power-CCS plants, providing KALINA with stable cash flow streams. Crusoe’s commitment to fund certain interconnection and gas supply security payments further de-risks the development process. The Framework Agreement’s structure, with separate Project Development Agreements for each site, allows for tailored commercial arrangements and phased project execution.
This collaboration positions KALINA at the forefront of integrating clean energy solutions with the rapidly expanding AI data centre market, potentially setting a benchmark for sustainable infrastructure development in Alberta and beyond.
Bottom Line?
KALINA’s partnership with Crusoe marks a pivotal step toward sustainable AI infrastructure, with long-term contracts poised to underpin future growth and financing.
Questions in the middle?
- How soon will the Project Development Agreements be finalized and construction commence?
- What are the specific terms and pricing structures of the long-term PPAs and VPPAs?
- How will regulatory approvals and Alberta’s energy policies impact project timelines and economics?
