Google is set to construct its inaugural data center in Minnesota, a significant development that will also see the tech giant deploy substantial renewable energy capacity within the state through a new agreement with utility provider Xcel Energy. The announcement marks a pivotal moment for Minnesota’s burgeoning tech infrastructure and its commitment to clean energy initiatives.
The proposed facility, slated for a sprawling 480-acre site in Pine Island, a community of approximately 4,000 residents located about 70 miles southeast of Minneapolis, is designed to power advanced artificial intelligence applications and bolster Google’s expansive cloud computing services. This move signals Google’s strategic expansion into new geographical markets, likely driven by factors such as available land, a skilled workforce, and favorable energy policies.
While the project has encountered some local opposition, primarily concerning its environmental impact and potential strain on electricity resources, the Pine Island City Council has expressed support, approving preliminary development plans and offering significant financial incentives, including a $36 million tax abatement. City officials project over $130 million in tax revenue from the data center, underscoring the economic benefits anticipated for the region.
The dialogue around data center development in the U.S. has intensified, with communities increasingly voicing concerns about rising electricity costs and water consumption for cooling systems. Google has stated its commitment to mitigating these concerns by fully covering the costs associated with the data center’s energy consumption and any necessary upgrades to the electrical grid. “What Google is doing is ensuring that when we show up, we aren’t putting additional costs on other ratepayers,” noted Amanda Peterson Corio, head of data center energy at Google. “We will pay 100% of our energy and electricity costs, and we will make sure that new additional capacity is put on to the grid to be able to serve our needs.”
Under the agreement with Xcel Energy, Google will facilitate the deployment of 1,400 megawatts of wind power, 200 megawatts of solar energy, and 300 megawatts of battery storage. These renewable energy projects, expected to become operational between 2028 and 2029, will be owned and operated by Xcel Energy. This collaborative approach aims to accelerate the integration of clean energy into the grid while utilizing a unique tariff designed to shield existing consumers from the immediate costs of infrastructure development. Bria Shea, president of Xcel Energy for Minnesota, North Dakota, and South Dakota, highlighted Google’s commitment to funding new transmission infrastructure, even if the data center project were to face unforeseen circumstances.
Minnesota has not historically been a primary hub for data centers, with Virginia leading the nation with 570 facilities, compared to Minnesota’s current 74. However, the increasing interest from major technology firms suggests a potential shift, positioning Minnesota as a strategic location for future digital infrastructure growth. The Minnesota Public Utilities Commission will still need to review and approve the agreement between Google and Xcel Energy.
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