Permitting power and fuel infrastructure

A data centre is usually approved as one development, but the infrastructure that powers it often needs approvals of its own, from different authorities and on different timelines: a high-voltage substation, a transmission line or underground cable connecting it to the grid, fuel storage for dozens of generators, sometimes a gas lateral and on-site power plant, and battery storage. These approvals frequently set the project's critical path. A data centre building can be designed and permitted in a year or two; a new transmission line can take five to ten years. This lesson describes the approvals for substations, transmission lines, generators and fuel storage, gas supply and on-site generation, battery energy storage and electrical installations, and how to coordinate them.

Who builds what

The first question for any piece of power infrastructure is who will own it, because ownership determines which rules apply:

• Utility-owned facilities, such as transmission lines and often the high-voltage side of the substation, are designed to utility standards, approved through utility regulatory processes, and built by the utility or its contractors, with the customer paying through contributions or tariffs.
• Customer-owned facilities, such as the medium-voltage switchgear, transformers within the site, generators and fuel systems, are approved through municipal building and electrical permits and environmental approvals like any other part of the development.
• Self-build options, in which the customer builds facilities to utility standards and transfers them to the utility, can accelerate schedules where the utility allows them.

The boundary, often called the point of interconnection or change of ownership, must be clear early because it determines who applies for which approvals, who carries schedule risk, and who pays.

Substations

Large data centres need their own substations, stepping down from transmission voltage (115 to 500 kV) to medium voltage (13.8 to 34.5 kV). A 300 MW campus might need a substation occupying 2 to 4 ha with several large power transformers.

In Ontario, transmitters building new transformer stations follow the Class Environmental Assessment for Minor Transmission Facilities, a streamlined process with notification, consultation and documentation, and a bump-up mechanism allowing the minister to require a fuller assessment. Customer-owned substations are generally approved through site plan approval and electrical inspection, though municipal zoning must permit them. In other provinces, the provincial utility regulator (such as the Alberta Utilities Commission, which approves substations and transmission facilities in Alberta) or environmental assessment processes apply.

Common issues include noise from transformers (Lesson 6), visual impact and screening, oil containment around transformers, stormwater, access for heavy deliveries, and electromagnetic fields at property lines. Long-lead equipment is often a bigger schedule risk than approvals: large power transformers have had delivery times of two to four years.

Transmission lines

If existing transmission cannot carry the new load, new or upgraded lines are needed. Transmission approvals are among the most difficult in infrastructure, because lines cross many properties and jurisdictions and are highly visible.

In Ontario, transmission lines of 115 kV and above generally follow the Class Environmental Assessment for Minor Transmission Facilities, with an individual environmental assessment required for the largest projects (such as long 500 kV lines), and leave to construct from the Ontario Energy Board under section 92 of the Ontario Energy Board Act for lines above the regulatory thresholds. The OEB examines need, prices, reliability and the quality of service, and the applicant must show that it has offered landowners standard easement agreements. In Alberta, the Alberta Utilities Commission approves need and siting; in Quebec, major lines go through the provincial environmental assessment and public hearing process (BAPE) and approvals by the Régie de l'énergie; and in British Columbia, the BC Utilities Commission and the Environmental Assessment Office are involved. Lines crossing provincial or national boundaries are regulated by the Canada Energy Regulator.

Transmission projects for a single data centre are usually shorter: a loop-in of an existing line to a new substation next to it, or a few kilometres of new line. Even so, approvals can take two to four years, and a study (DCE-420) may show that larger network upgrades many kilometres away are needed before the load can be served, which can take much longer. This is why sites next to existing high-voltage lines with spare capacity command high prices.

Generators and fuel storage

Air permits for generators were covered in Lesson 5. Fuel storage brings additional requirements, because a large campus may store hundreds of thousands of litres of diesel in belly tanks under each generator and in bulk tanks (DCE-340).

In Canada, the storage of flammable and combustible liquids is governed by Part 4 of the National Fire Code as adopted by each province (in Ontario, the Ontario Fire Code), covering tank design, secondary containment, separation distances, venting and protection from vehicle impact. In Ontario, the Technical Standards and Safety Authority (TSSA) also regulates fuel storage and handling under the Liquid Fuels Handling Code for installations within its scope. The CCME Environmental Code of Practice for aboveground and underground storage tank systems is referenced by several provinces, and federal storage tank regulations apply on federal lands. Tanks must be installed by certified contractors, and some provinces require registration.

Fuel deliveries need truck access, spill-proof fill points with overfill protection, and spill response procedures. Fuel polishing systems and tank monitoring keep fuel usable during long storage. Where renewable diesel (HVO) is used, fuel storage rules are the same as for petroleum diesel.

Gas supply and on-site generation

Where grid capacity is scarce, developers increasingly propose on-site generation from natural gas: reciprocating engines, gas turbines or fuel cells, either as a bridge until the grid connection is available or as permanent supply. These projects bring a further set of approvals:

• A gas lateral from a transmission pipeline: local distribution laterals are approved by the provincial regulator (for example, leave to construct from the OEB in Ontario for pipelines above thresholds), and interprovincial pipelines by the Canada Energy Regulator.
• Air approvals for continuous operation, which are far more demanding than for standby generators: continuous gas turbines and engines need an Environmental Compliance Approval with emission limits for nitrogen oxides and carbon monoxide, often requiring selective catalytic reduction.
• Electricity regulation: whether a generator serving a single customer must be licensed, how it interacts with the grid (islanded or parallel), and whether it may export. Arrangements for large loads co-located at existing power plants, including nuclear plants, have raised regulatory questions about cost allocation and grid reliability.
• Water and noise approvals for the generating plant, and greenhouse gas reporting and carbon pricing obligations.

On-site generation can be faster than a grid connection, but its approvals, especially for air emissions and gas supply, typically take one to three years, and equipment such as gas turbines has its own long lead times.

Battery energy storage

Battery energy storage systems at data centres (DCE-340) need approvals focused on fire safety: compliance with fire codes for lithium-ion systems, listing to UL 9540 with large-scale fire testing to UL 9540A, separation distances, explosion prevention or deflagration venting, and emergency response plans agreed with the fire service. Many municipalities have adopted specific zoning provisions for battery storage, including setbacks from homes, after high-profile fires elsewhere. Early engagement with the fire service is essential.

Electrical installation permits

Customer-owned electrical installations require permits and inspection under the provincial electrical code, the Canadian Electrical Code Part I as adopted with amendments: in Ontario, the Electrical Safety Authority issues notifications of work and inspects installations, including medium-voltage equipment, and other provinces have equivalent authorities. Utility-owned equipment is built to the utility's standards and the requirements for supply authorities. Some provinces require approval of plans for high-voltage installations before construction.

For large campuses, agreeing with the inspection authority early on the inspection approach, the treatment of factory-built modular electrical rooms (often certified or field-evaluated as complete assemblies), and the sequence of energization for phased construction avoids delays when the first building is ready to energize.

Coordinating infrastructure approvals

Because infrastructure approvals involve different authorities, effective coordination is essential:

• Map every approval, its authority, its prerequisites and its typical duration in a permit register, and identify the critical path, which is often the transmission connection.
• Align environmental studies so that one set of field surveys supports the data centre, substation, line and gas lateral applications.
• Coordinate consultation, so that communities and Indigenous nations are not asked to engage separately on each component without seeing the whole project.
• Order long-lead equipment, such as transformers, switchgear and generators, at risk where the business case supports it, since equipment lead times can exceed approval times.
• Plan phases so that early buildings can be energized from initial infrastructure while later infrastructure is approved.
• Keep a single technical description of the project (capacities, equipment counts, fuel volumes, emissions, noise and water figures) under change control, so that every application uses the same numbers; inconsistencies between applications are quickly noticed by reviewers and opponents and can undermine the credibility of the whole project.