Xcel Energy has announced an Electric Service Agreement with Alphabet Inc.’s Google to supply power to a new data center in Pine Island, Minnesota, including a plan to bring 1,900 MW of new clean energy resources – consisting of wind, solar and long-duration energy storage – to support the facility’s electricity needs while advancing both state clean-energy goals and grid resilience.

Overview on Google’s New “Project Skyway” Data Center in Minnesota

Location: Pine Island, Minnesota

Utility partner: Xcel Energy

Offtaker: Google (Alphabet Inc.)

Clean energy supply portfolio: 1,400 MW wind, 200 MW solar, 300 MW long-duration storage (iron-air)

Investment: Google to fund all data center service and grid infrastructure costs for the Minnesota project, including a $50 million contribution to Xcel’s Capacity Connect Program.

The agreement will also be filed with the Minnesota Public Utilities Commission (MPUC) for regulatory review and approval.

Financing Structure

The financial structure is a representation of a self-funded grid expansion model where Google bears infrastructure costs while Xcel ensures reliability and affordability for existing customers.

The inclusion of a Clean Energy Accelerator Charge is also in line with Minnesota regulatory requirements that utilities structure new large-load service agreements such that incremental costs are covered by large load customers like data centers rather than ratepayers.

What the Pine Island Data Center Means for Google and the State of Minnesota

The project is a show of utility-corporate partnerships in the U.S. energy sector alongside others like Meta’s PPA for 100% supply from Walker Solar project in Pennsylvania. This is mainly being driven by significant electricity demand from AI data centers. Additionally, by coupling wind, solar and battery storage capacity, the Pine Island data center plan contributes to clean energy transition in the state of Minnesota. This is alongside providing long-duration energy resources to the grid and supporting economic development through construction jobs and local tax revenues.

Project Team Backing Xcel Energy Plan to Power the New Project Skyway Data Center in Minnesota

Utility/Service Provider

• Xcel Energy as power supplier, grid coordinator

Offtaker/Data Center Owner

• Google (Alphabet Inc.) – with the data center being its first in Minnesota

Regulatory

• Minnesota Public Utilities Commission (MPUC)

Local Development and Planning

• City of Pine Island as community partner

Construction Partner

• Ryan Companies – involved in local site development

Project Outlook

If approved by MPUC, construction of the Minnesota data center by Google will proceed with a significant build-out of clean generation and storage that also advances the state’s renewable goals and supports Google’s expanding footprint in digital infrastructure. This will also position the state as a emerging hub for large-scale data center power partnerships.