Google announces new data center in Minnesota: commits to all-inclusive electricity costs with no price increase

Google Announces Data Center in Minnesota with Renewable Energy Investment

On February 25, IT Home reports that Google, a subsidiary of Alphabet, announced on Tuesday that it will build its first data center in Minnesota and deploy significant new renewable energy sources, following an agreement with utility company Xcel Energy.

The data center will be located on a 480-acre site in Pine Island. The town has a population of about 4,000 and is approximately 70 miles southeast of Minneapolis. Google had not previously disclosed its involvement in the project. The facility will be used for artificial intelligence applications and Google’s broader cloud services.

The proposed Pine Island data center faced opposition from the local community but received support from the city council and has not yet broken ground. As some residents blame rising electricity prices on data centers and express environmental concerns, such facilities are increasingly encountering political resistance in communities across the U.S. Data centers also consume large amounts of water for cooling.

Google declined to disclose the data center’s power consumption. The company stated it will cover all costs for the necessary grid infrastructure. The agreement with Xcel Energy is still subject to review by the Minnesota Public Utilities Commission.

Amanda Peterson-Corio, Google’s head of data center energy, told CNBC, “What Google is doing is ensuring that when we move in, we won’t impose additional costs on other electricity users. We will pay in full for our energy and power needs and ensure the grid has enough capacity to meet our demands.”

Briya Shea, president of Xcel Energy for Minnesota, North Dakota, and South Dakota, said the Pine Island data center will require additional transmission infrastructure. Corio added that even if the data center is not ultimately built, Google will bear all costs related to new transmission lines associated with the project.

Under the agreement, Google will deploy 1,400 MW of wind power, 200 MW of solar, and 300 MW of battery storage to the grid. These renewable energy projects will be owned by the utility. Shea estimates the projects will be operational in 2028 and 2029.

Google also plans to pay a premium for renewable energy under a special electricity rate, designed to shield consumers from infrastructure costs and accelerate the adoption of clean energy in Minnesota.

Residents of Pine Island have formed an organization called “Stop Pine Island Data Center.” The Minnesota Center for Environmental Advocacy filed a lawsuit in October challenging the environmental impact assessment of the project.

According to local broadcaster KTTC, the Pine Island City Council approved two preliminary development plans for the data center in December and passed financial incentives, including $36 million in tax breaks, in February.

KTTC reports that Elizabeth Howard, the municipal administrator, said Pine Island will receive over $130 million in tax revenue from the project.

Minnesota was not previously a major data center market, but now large tech companies are increasingly interested in the state. Data Center Map reports that Minnesota currently has 74 data centers, compared to Virginia’s 570, the largest data center market worldwide.