Data centers spark opposition from residents, concerns over energy use
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Jeff Schottler’s backyard looks out a scenic golf course in the Twin Cities suburb of Farmington.
But his view could soon change if the golf course becomes home to a data center campus on 340 acres with up to 12 buildings, some as tall as 50 to 80 feet.
Schottler and some of his neighbors worry the hyperscale data center known as Farmington Technology Park will change the rural, residential feel of their neighborhood and generate a humming noise.
“I didn’t buy next to an industrial park,” Schottler said. “I bought [property] surrounded by homes, with the knowledge that I’d be surrounded by more.”
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Tract, a development company based in Colorado, is proposing to build the $5 billion project for an undisclosed company. The city of Farmington recently approved a final plat for the project.
It’s one of several data centers under construction or planned in Minnesota. Facebook’s parent company, Meta, is building an $800 million facility in Rosemount. And both Microsoft and Amazon have purchased land for data centers next to Xcel Energy’s retiring coal plant in Becker.
The explosion of data centers is driven by a rise in cloud computing, smart devices, streaming services and artificial intelligence. The average U.S. household now has 21 devices connected to the Internet — from smart phones and watches to thermostats and doorbell cameras. There’s a growing need for more physical space to process, store and deliver vast amounts of data.
Data centers have gotten a lot more efficient since the early days of the Internet, said Matt Grimley, a researcher at the University of Minnesota’s Humphrey School of Public Affairs. But then came hyperscale data centers, like the one proposed in Farmington, he said.
“It’s like the same thing, but on steroids,” Grimley said. “And the localized energy use impacts are a lot more acutely felt now versus way back in the 2000s.”
Data centers consume a lot of electricity. It is needed to power servers and equipment and keep them cool. And their growth coincides with a nationwide push to electrify vehicles, home heating and appliances, sparking concerns about whether utilities can meet the increased demand for power.
“There’s no doubt that we are going to have to build more generation to serve the growing load,” said Beth Soholt, executive director of the nonprofit Clean Grid Alliance, which advocates for renewable energy policy.
Soholt said utilities are on track to meet some of the demand from data centers, with plans to add wind and solar energy. And Minnesota has been proactively pushing to update the electric grid and add transmission lines to deliver electricity to where it’s needed, she said.
“The timeliness — can we do it fast enough — will be an issue,” Soholt said. “Then, how do we parse out the costs so that everybody wins? So that the data centers pay their fair share, so that other electric customers get benefits and don't pay all the costs.”
Some environmental groups worry data centers will make it harder to meet the energy demand without extending the use of fossil fuels that contribute to climate change. In some states, data center owners have turned to nuclear plants to supply electricity. In Wisconsin, utilities have proposed building new gas plants.
Some of the largest data center owners, including Google, Meta, Amazon and Microsoft, have corporate goals related to clean energy. They’re interested in building in states whose policies and utilities can help them meet those goals, said Audrey Partridge, policy director at the nonprofit Center for Energy and Environment, during a recent state Public Utilities Commission meeting.
Minnesota has a law requiring utilities to provide 100 percent carbon-free electricity by 2040.
Xcel Energy’s regional president, Ryan Long, recently told state regulators the utility is pursuing 1.3 gigawatts worth of data centers in its service territory by 2032. He said Xcel believes it can handle that amount of increased demand while meeting the carbon-free law and providing reliable service.
Minnesota is an attractive location for data centers because of its geographic location, cooler climate, skilled workforce and tax incentives. Qualifying companies get a 20-year sales tax exemption on equipment, software and electricity.
Data center proponents say they bring economic benefits to communities. Graham Williams, chief investment officer for Tract, said the Farmington hyperscale data center will generate about $15 billion in investment, including the buildings, servers and equipment and create jobs.
“We’re real big believers that if and when this is done correctly, the community is going to have a massive benefit in the form of increased tax base,” Williams said.
But critics like Cathy Johnson, who lives near the proposed hyperscale data center in Farmington, say there’s too little oversight, leaving decisions to small-town staffs and officials who aren’t experienced with such large-scale development.
“We’re just asking to slow down, come up with the process,” Johnson said. “The state needs to be developing the parameters under which these data centers can be licensed and can operate, and where they need to be placed. And Farmington is just the living example of it.”
