MINNEAPOLIS, Minnesota – – Xcel Energy has announced an agreement to power a new Google data center in Pine Island, Minnesota, a move that signals a significant investment in both the state’s economy and its clean energy infrastructure. The partnership, revealed today, will see the utility provide power to a facility supporting core Google services including Workspace, Search, YouTube, and Maps.
The agreement extends beyond simply supplying electricity. Xcel Energy and Google are collaborating to bring 1,900 megawatts of new clean energy onto the grid, a substantial contribution towards Minnesota’s carbon reduction goals. This initiative is designed to ensure that the expansion of data center capacity does not lead to increased costs for existing Xcel Energy customers, a key commitment outlined in the agreement.
“Data centers are the backbone of the 21st century economy, and we’re excited to work with Google to advance the prosperity of our region and ensure our current customers benefit,” said Bria Shea, president of Xcel Energy–Minnesota, North Dakota and South Dakota. She emphasized that the arrangement serves as a “model for data center partnerships” by simultaneously supporting Minnesota’s carbon-free future and driving investment into local communities.
The growing demand for data storage and processing, fueled by the proliferation of cloud computing, artificial intelligence, and digital services, has placed increasing strain on energy grids globally. Data centers are notoriously energy-intensive operations, requiring vast amounts of electricity to power servers and maintain optimal operating temperatures. This partnership aims to address that challenge by pairing increased capacity with a commitment to renewable energy sources.
Under the terms of the agreement, Google will cover all costs associated with its new service, adhering to both its standard practices and Minnesota’s regulatory requirements for large-scale energy consumers. Xcel Energy highlighted that, over the past five years, average residential electric bills in Minnesota have been 27% below the national average, with annual increases since 2013 remaining below the rate of inflation at 1.55%.
A key component of the clean energy expansion is a Clean Energy Accelerator Charge (CEAC), which will fund 1,400 MW of wind power, 200 MW of solar energy, and 300 MW of long-duration energy storage. A $50 million investment will be directed towards Xcel Energy’s Capacity*Connect Program, designed to enhance grid reliability. These additions are expected to push Xcel Energy beyond its current 70% carbon-free electricity mix.
The project also includes the installation of a 300 megawatt (30 gigawatt-hour) Form Energy iron-air battery system, currently the largest battery project of its kind announced globally. This 100-hour battery system is designed to store energy during periods of high production and low demand, releasing it back onto the grid during peak times, thereby bolstering grid stability and providing firm capacity even over extended periods.
Amanda Peterson Corio, head of Data Center Energy at Google, underscored the company’s commitment to responsible grid citizenship. “Our commitment to Minnesota goes beyond building infrastructure; it’s about being a responsible partner, neighbor, and a good citizen of the grid,” she stated. Corio added that the agreement supports Google’s broader goals of expanding its AI and cloud capabilities while delivering long-term value to the communities in which it operates.
The economic implications of the project are also being welcomed by business leaders in Minnesota. Doug Loon, president and CEO of the Minnesota Chamber of Commerce, noted that recent legislation extending incentives for data center operations, while balancing environmental considerations related to water and energy use, has created a favorable environment for investment. “The Minnesota Chamber is excited about the partnership between Google and Xcel Energy to deliver this project and we look forward to the economic benefits it will bring to Minnesota,” Loon said.
The Electric Service Agreement is now slated for review by the Minnesota Public Utilities Commission (MPUC). Formal approval from the MPUC is required before Xcel Energy can begin supplying power to the new Google data center. The timeline for MPUC review was not specified.
Xcel Energy Inc. (NASDAQ: XEL) serves approximately 3.9 million electricity customers and 2.2 million natural gas customers across parts of eight states: Minnesota, Colorado, Wisconsin, Michigan, North Dakota, South Dakota, New Mexico, and Texas. Google, a subsidiary of Alphabet Inc., continues to expand its global network of data centers to meet the growing demands of its services.
