Alphabet’s Google will build its first data center in Minnesota and deploy a significant amount of new renewable energy in the state under an agreement with utility Xcel, the companies announced Tuesday.
The data center will be located on a 480-acre site at Pine Island, a town of about 4,000 people some 70 miles southeast of Minneapolis. Google had not publicly disclosed its role in the project previously. The facility will be used for artificial intelligence applications as well as Google’s broader cloud business.
The proposed data center at Pine Island has faced community opposition but is supported by the city council. It has not begun construction yet. Data centers are facing political blowback in communities across the U.S. more often as people blame them for rising electricity prices in some regions and worry about their environmental impact. Data centers also consume a significant amount of water for cooling.
Google declined to disclose how much electricity the data center will consume. The tech company said it will pay for any electric grid infrastructure needed for the project. The Minnesota Public Utilities Commission still must review the agreement between Google and Xcel.
“What Google is doing is ensuring that when we show up, we aren’t putting additional costs on other ratepayers,” Amanda Peterson Corio, head of data center energy at Google, told CNBC in an interview. “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.”
Additional transmission infrastructure is needed for the Pine Island data center, said Bria Shea, president of Xcel for Minnesota, North Dakota and South Dakota. Google will pay for any new transmission associated with the project even if the data center does not materialize for some reason, Corio said.
Google will deploy 1,400 megawatts of wind power, 200 megawatts of solar and 300 megawatts of battery storage to the grid under the agreement with Xcel. The renewable projects will be owned by the utility. They are expected to come online in 2028 and 2029, Shea said.
Google will also pay a premium for the renewable power under a tariff designed to insulate consumers from the infrastructure costs while accelerating the deployment of clean energy in Minnesota, according to the tech company.
The town’s residents have formed a group called “Stop the Pine Island Data Center.” The Minnesota Center for Environmental Advocacy filed a lawsuit in October challenging the environmental review of the project.
Pine Island’s city council approved two preliminary development plans for the data center in December, according to local broadcaster KTTC. It also approved financial incentives that include a $36 million tax abatement in February, according to the outlet.
City Administrator Elizabeth Howard said Pine Island would collect more than $130 million in tax revenue from the project, according to KTTC.
Minnesota has not been a major data center market in the past but the big tech companies are increasingly eyeing the state. There are currently 74 data centers in Minnesota. Virginia, the largest market worldwide, has 570 such facilities, according to the Data Center Map.
