Happy Valley-Goose Bay's economic future is being threatened by an influx of data centres, says the mayor of the central Labrador town.

Data centres are buildings that house large groups of networked computer servers for storing or processing information. There are currently two such centres in Happy Valley-Goose Bay which are used to create crypto-currencies such as bitcoin.

Mayor Wally Andersen is worried the high amount of power the centres consume is pushing the local electrical grid to its limits.

Happy Valley-Goose Bay Mayor Wally Andersen. (Jacob Barker/CBC)

While Newfoundland and Labrador Hydro wants to expand its transmission line to the town, it already has requests from data centres that would use all the additional power that would provide.

Right now, the system can handle about 77 megawatts, and at peak times customers use even more than that. N.L. Hydro wants to spend $20 million to expand capacity from 77 to 104 megawatts.

The centres consume 1.5 megawatts of power.

"We'll do this upgrade, and probably less than 24 hours after the new line comes on we're back to square one, we have no power," Andersen said.

A matter of jobs

Anderson worries that with the system stretched to its limit, any new businesses wouldn't be able to open if there's no electricity to power it. He wonders whether all the power being used by the centres shouldn't go to other local businesses that have a bigger impact on the local economy.

"A little corner store down in the valley that's struggling to keep its head above water employs more people than the two data centres operating in our community right now," he told CBC Radio's Labrador Morning.

Data centres contain servers and computer equipment, like those seen in this file photo, for storage and processing of information. (Kim Brunhuber/CBC)

According to Great North Data, which owns one of the centres, there are currently three full-time staff employed at the facilities in Happy Valley-Goose Bay, three part time and between 10-20 will be working full-time there by the end of the year. That's in addition to executives and staff who travel to the centres for site visits.

The company has a cluster of buildings in Happy Valley-Goose Bay and will be starting a new construction project soon.

Future business prospects

Andersen said he's concerned about the future of his community if word gets out that there's not enough power for new building.

"What message does that send to the province and the country and the world? Basically, we've got the Upper Churchill in our backyard, we've got Muskrat Falls in our backyard, but when it comes to bringing employment to our communities, we're maxed out," he said.

James Goodwin, co-founder of Great North Data, says the facility in Happy Valley-Goose Bay will employ 10-20 people by the end of the year. (Submitted)

N.L. Hydro told Andersen that it can't refuse power to groups that request it, and that the provincial government has to change legislation before that policy can change.

In a separate interview with CBC, the mayor said the town is checking into whether it has authority to refuse business occupancy permits to data companies trying to set up in the town. He also worries that if it did take that step it could open the town up to a lawsuit.

Andersen would like to see the province create guidelines for data centres to ensure there is still electricity left for other businesses.

The mayor and other town officials are meeting with MHA Perry Trimper next week, and also want to meet with Premier Dwight Ball — who is also the minister responsible for Labrador Affairs — and Natural Resources Minister Siobhan Coady.

Anderson said the town could create bylaws or do other things to try to deter the data centres, but he said it probably wouldn't make a difference.

"We could raise the taxes on these companies sky-high, and at the end of the day, because of the business they do, they still laugh all the way to the bank."