A project that generated excitement both locally and provincially is officially on hold.
More than a year after the announcement that Okotoks company CEGEN Environmental Group would be building a first-of-its kind Micro Modular Data Center (MMDC) on North Railway Street, the project is on pause.
“We raised most of the capital, we did all those things. But we basically just ran out of time before the agreement with the Town [ended],” said CEGEN CEO Steve Morgan. “We took a couple of short extensions in order to get there, and the risk was too high to sign, even if I was at 80 per cent, 80 per cent is still a few million short at that point.”
The state of the art building that Morgan once said would be the “anchor” for tech companies in the area is no more, at least for the time being, as the conditional deal between the Town of Okotoks and CEGEN has lapsed, citing economic downturn associated with the pandemic and the inability to fulfil contracted conditions as a result.
The data centre – essentially an Internet hub – was set to revolutionize the industry – a 20,000 square-foot operation that was going to cost 65 per cent less per square foot to construct than a traditional data centre and would reduce carbon emissions by 44 per cent using the company’s technology.
CEGEN had its start in the industry about five years ago, creating technology that trapped exhaust from mechanical fans and filtered it back into operational power. This process was going to be applied to the MMDC – large chillers on the end of the building designed to keep servers at stable temperatures would have their energy captured and cycled back into the facility.
A greenhouse was also set to be on the site of the MMDC. Carbon dioxide was going to be cycled through living walls into the greenhouse, where the plants would convert it into oxygen. Produce grown in the greenhouse was to be donated to the local food bank, according to Morgan.
The company is still working on various projects in the U.S., Australia, New Zealand and British Columbia, Morgan said, and the idea of the MMDC in Okotoks is still very much alive. But to get there, more arrangements have to be made.
“I don ‘t think we’ll partner with the Town again, we’ll just partner with another industry group — either Shaw or whatever the case may be, we’re having those talks,” Morgan said. “The Town [was] great to work with, but they didn’t have any experience at all. And in the end, it was just a land deal for them, nothing more.”
Town of Okotoks chief administrative officer Elaine Vincent also said that the economic situation contributed to the lapsing of the agreement, and that it is understandable that another conditional land agreement between the parties may not be feasible.
“I think the struggle that CEGEN has is about the land use and the size of the land that they need, and it could be that the land that the Town has available may not meet that need,” she said.
Morgan said that CEGEN is looking for a project partner that would also be the occupants of the building when plans become more solidified in the new year.
He also said that the piece of land next to Seaman Stadium on North Railway Street was actually the company’s second choice of location, and he is not worried about finding another place that will work for the MMDC, adding that joining up with another company in the industry may provide them with more options as far as location, timelines and building plans.
“The project is just sitting in a suspended animation at the moment while we get a few other things done,” Morgan said. “Possibly [in] 2022, we’ll go after it again.”
The MMDC would be extremely valuable to the community once it does come to fruition, Morgan said, adding it would immediately create jobs in the area, limit the number of people that have to travel to Calgary for jobs in the tech sector and create scope for additional courses at Bow Valley College.
“From the Town’s perspective, we certainly wish CEGEN the best and we hope they do have the opportunity to invest in Okotoks because we do want that business here,” Vincent said. “But we do certainly understand economic challenges currently – of raising funding and going into a new venture.”
"[The Town] looks forward to seeing them become successful.”
Despite the stalling of the MMDC project, Morgan said that CEGEN is focused on building itself up and out from Okotoks and added that the local data centre project is near and dear to him and his partners hearts.
“We’re dedicated to Okotoks,” he said.
With files from Krista Conrad