The Alberta Utilities Commission has rejected the power plant application for Synapse’s proposed $10-billion data-centre development in Olds, Alta., ruling the facility would be too close to the surrounding community.

Synapse sought approval for a 1,400-megawatt natural gas plant and 600 emergency diesel generators with another 1,800 megawatts of capacity. The electricity would serve a co-located, one-gigawatt data centre rather than Alberta’s power grid.

The 110.5-hectare development would occupy land equal to about 10 per cent of the town’s area. Its boundary would be about 30 metres from the nearest residential properties, with more than 700 homes located within 800 metres.

The commission said Synapse did not provide a compelling reason for placing a project of that size next to an established community. While noise, air emissions and other effects could potentially be mitigated, those measures would not address the regulator’s central concern about the location.

Synapse considered alternative sites in Rocky View County, Mountain View County and Ponoka County but did not show why locations farther from homes and businesses were unavailable or unworkable.

The commission received submissions from approximately 1,500 interested parties and granted standing to 919 interveners. The Town of Olds supported the project in principle, citing potential investment, jobs and municipal tax revenue.

The ruling is the project’s second regulatory setback. The commission closed Synapse’s first application in March because of errors, incomplete information and internal inconsistencies. The $10-billion project was expected to create approximately 2,000 construction jobs and more than 1,000 permanent positions.

Synapse has 30 days to ask the commission to review the ruling. It can also seek permission to appeal to the Alberta Court of Appeal within 30 days. Another option is to submit a new application, likely with a different site or a stronger case for the Olds location.

The ruling applies only to the power plant. The commission does not approve or regulate data centres.