Kalina Power Ltd (ASX:KPO, FRA:WHS) says a newly formalised energy framework between Canada and Alberta is expected to improve the development outlook for projects being advanced by its 100%-owned subsidiary KALiNA Distributed Power (KDP).
The Implementation Agreement, signed on May 15, largely ratifies a November 2025 memorandum of understanding and is designed to harmonise federal and provincial policy on carbon management, emissions regulation and near-term investment in Alberta’s energy sector.
Key points include:
- Canada’s Clean Electricity Regulations will be held in abeyance in Alberta, conditionally suspending requirements for gas-fired generators to physically abate emissions by 2035.
- Alberta’s emissions compliance cost will be set at C$100/tonne from 2027 to 2029, rising to C$115/tonne in 2030 and C$140/tonne by 2040.
- Gas-fired power developers will have the flexibility to pay carbon costs rather than being required to deploy carbon capture and sequestration (CCS).
- The agreement includes provisions aimed at supporting CCS, including carbon contracts for difference and a commitment to offer 75 million tonnes of CFDs to CCS projects between 2030 and 2040.
- Alberta is preparing a policy framework to support large-scale data centre investment by July 1, 2026.
Regulatory clarity supports project financing
The agreement provides greater regulatory certainty and flexibility for Kalina's Alberta power projects, particularly as demand from AI data centres, electric vehicles and industrial reshoring increases pressure on Canada’s electricity grid.
Managing director Ross MacLachlan said the agreement was “an important regulatory catalyst” and pointed to a more constructive policy environment for power plants and data centres.
"This Agreement represents an important regulatory catalyst that we have been waiting for. Together with other regulatory activity underway in Canada and Alberta, we can begin to see a consistent theme of constructive policies and themes that are being developed in concert to create a very positive regulatory environment. Infrastructure projects such as power plants and data centres need the type of regulatory certainty and supportive legislative jurisdictions that we see emerging with all this news.
"After several years of uncertainty, it is great to see these sentiments change to reflect pro-business, common sense policies; the impact of which may serve to align Federal regulations with Alberta’s publicly stated objective to attract over $100 billion of data centre investment and position the province as North America’s premier destination for Artificial Intelligence and Data Centres infrastructure.”
For KDP, the agreement strengthens the case for CCS while preserving the option to proceed without it. The company said all of its roughly 200-megawatt sites had access to CCS infrastructure, giving it flexibility to meet different offtaker priorities.
What’s next
KALiNA will monitor further regulatory developments, including Alberta’s data centre policy framework and the Alberta Electric System Operator’s Large Load Application Process, expected by the end of May 2026.
Proposed “tethering” rules, requiring large loads such as data centres to be paired with equivalent new power generation, could improve KDP’s position as a partner for data centre developers seeking grid access in Alberta.