Sharing the load: How collaborative data centre expansion could lead to a better grid

A new report from MaRS and Mantle Climate explores the various factors that could determine whether AI infrastructure growth could strengthen or strain the province’s energy systems and communities.

We live in a power-hungry age.

As policy-makers, business leaders and investors push to accelerate the adoption of artificial intelligence (AI), the demand for electricity is expected to surge. The Independent Electricity System Operator (IESO) estimates that an additional 5,000 megawatts will be required to meet the growing need for electricity in the next decade.

Data centres are quickly becoming core economic infrastructure — they are as fundamental to competitiveness as transportation networks and energy grids. Reliable access to secure, low‑latency AI compute power is necessary for innovation and productivity across sectors, including advanced manufacturing, transportation, healthcare and research. Jurisdictions without this key infrastructure risk losing talent, investment and scientific leadership to regions with more robust resources.

Building domestic AI compute capacity is not only essential to boosting Canada’s productivity and competitiveness, it is also key to strengthening data security and sovereignty, attracting new investment and supporting high‑quality employment. The federal government has signalled its goal of increasing AI infrastructure development through both policy documents and funding programs, including Innovation, Science, and Economic Development Canada (ISED)’s $2 billion for compute infrastructure and training and development.

So how can we best harness this wave of infrastructure investment to build a more resilient and sustainable energy system while delivering robust sovereign compute power?

To explore this opportunity, MaRS Discovery District and Mantle Climate launched the Future of Data Centres in the Greater Toronto Hamilton Area (GTHA) and Ontario initiative. With support from The Atmospheric Fund (TAF) and advisory committee members Toronto Hydro, Enbridge, Hydro One, Ontario Power Generation and the IESO, this project convened key stakeholders with a bold aim: investigate data centre growth trajectories over the next decade, quantify their system-level impacts and identify solutions that could mitigate those impacts.

Download the report

Through research, high-level modelling, stakeholder engagement and scenario analysis, we estimate that Ontario could reach 1.5 gigawatts of new data centre load by 2035, with high‑growth scenarios approaching 3 gigawatts. Based on scenario findings and cross‑sector input, we have identified several opportunities for Ontario to manage data centre growth responsibly and sustainably:

• Clarify Ontario’s strategic stance: The province needs to determine its priorities for sovereign compute power, research capacity and digital-economy competitiveness.
• Leverage policy tools: Use Bill 40, Integrated Energy Plan Energy for Generations and other policy tools to fast-track initiatives that deliver economic, sovereignty and community benefits while supporting a reliable, affordable and clean system.
• Prioritize key projects: Allocate grid access and streamline permitting processes for projects that demonstrate strong value per megawatt, including availability of on-site generation, demand response, waste heat utilization, efficiency and sustainable construction, while screening out speculative or low‑value load.
• Improve coordination: Build predictable and timely pathways for sustainable development across provincial, municipal and utility approvals.
• Foster collaboration: Establish a provincial forum or mechanism to enable co-located infrastructure planning and cross-sector initiatives.
• Develop a sustainable pilot: Create a co-located data centre development to test out mitigation solutions, governance models and permitting approaches.

This report provides an analytical foundation and cross‑sector insights to support the province’s emerging digital infrastructure strategy.

Download the report

MaRS is working to accelerate the adoption of Canadian innovations that can help decarbonize our existing structures and building better new ones. Learn about Mission from MaRS: Better Buildings here.