Kalina Power partners with Crusoe Energy to develop AI data centers in Alberta

CALGARY:  Kalina Power Limited (ASX: KPO) has unveiled a strategic partnership with Crusoe Energy to develop artificial intelligence (AI)-focused data centers co-located with Kalina’s Power-CCS (carbon capture and sequestration) plants in Alberta, Canada.

The collaboration aims to address the growing demand for clean, reliable energy to power the rapidly expanding digital infrastructure sector.

Under the framework agreement, Crusoe will own and operate the AI data centers, while Kalina will manage the Power-CCS plants. The partnership anticipates the development of long-term tolling Power Purchase Agreements (PPAs), ensuring stable cash flows for Kalina. Crusoe will also fund certain electrical and gas supply interconnections, further de-risking the projects.

The initiative aligns with Alberta’s emergence as a global hub for data center activity, driven by its abundant low-cost natural gas, cold climate for efficient cooling, and supportive regulatory environment. The province has seen a surge in data center investments, with over 6.4 gigawatts (GW) of grid connection applications filed as of January 2025.

Kalina has secured five strategic sites in Alberta, capable of hosting up to 1.7 GW of Power-CCS plants. Each plant is designed to generate approximately 170 megawatts (MW) of electricity while capturing 1,730 tonnes of CO₂ daily. The projects are expected to benefit from significant government incentives, including federal carbon capture tax credits and Alberta’s Accelerated Carbon Capture Incentive Program (ACCIP), which could cover up to 37% of capital expenditures.

“This partnership represents a generational opportunity to combine cutting-edge AI infrastructure with clean, baseload power,” said Ross MacLachlan, CEO of Kalina Power. “Alberta’s unique advantages position us to lead in this space, and we are excited to work with Crusoe to deliver these projects.”

The development will proceed in phases, starting with Pre-FEED (Front-End Engineering Design) and advancing through FEED and construction. Kalina plans to finance each stage through a combination of equity, debt, and potential asset sales, with the goal of achieving commercial operation by the late 2020s.

The announcement comes amid a flurry of activity in Alberta’s data center market. Recent transactions, including the sale of a 130 MW site by Captus Energy to Gryphon Digital for C$27 million, underscore the high value of development-ready sites in the region. Kalina’s management believes its portfolio is well-positioned to capitalize on this trend, with potential for near-term asset sales to fund further development.

Kalina’s experienced leadership team, which has collectively developed over 20,000 MW of power projects globally, will oversee the initiative. The company’s board includes industry veterans such as Stephen White, former CEO of Veresen Inc., and Matthew Jenkins, former CEO of Macquarie Capital Markets Canada Ltd.

As the global demand for data centers continues to grow, Kalina’s partnership with Crusoe Energy signals a significant step forward in integrating clean energy solutions with the digital economy. The projects are expected to not only meet the energy needs of AI-driven data centers but also contribute to Alberta’s goal of reducing carbon emissions through advanced CCS technology.