Google Cancels $600M Minnesota Data Center But Doesn’t Rule Out Future Projects
Originally announced in 2019, the $600 million data center would now cost Google an additional ~90 million after adjusting for inflation.
In a significant blow to Becker, Minnesota, Google recently shelved its $600 million data center that was poised to revive economic activity in the city. The news was confirmed after Xcel Energy disclosed that it had terminated its contract with Google.
The Minnesota-based Xcel Energy disclosed through a filing with the state’s utility regulators that it terminated its electric service agreements with Google after the latter’s affiliate company, Honeycrisp Power LLC, didn’t provide a notice to proceed with the project.
“Honeycrisp did not provide the Company with a Notice to Proceed with the project by the agreed-upon deadline under the terms of the Retail Electric Service Agreement, Competitive Response Rider Agreement, and Interconnection Agreement for Retail Electric Service at Transmission Voltage (the “Agreements”) approved by the Commission in this docket,” the filing reads.
“As a result, on December 8, 2022, the Company provided Honeycrisp with a notice terminating the Agreements. The Company continues to engage with Honeycrisp about the potential to develop future projects.”
Originally announced in 2019, the $600 million data center would now cost Google an additional $90 million after adjusting for inflation. No wonder the progress has been snail-paced, especially after what has been a rough year for tech companies such as Google and Meta.
See More: What is a Data Center? Working, Types, Architecture, and Best Practices
Experts have reasons to believe that the Becker data center project was indefinitely postponed because of recent economic indicators such as poor supply and demand. However, Google’s situation isn’t as dire as Facebook-parent Meta, which has canceled multiple projects that were already underway, unlike the Becker data center project, whose execution was slow from the outset.
The project was expected to create 50 permanent and up to 2,000 construction jobs. Xcel’s agreement with Google also included the sale of 300 acres of real estate as the location of the new data center, which never materialized.
Google also successfully negotiated tax breaks from the Becker and Sherburne counties, with the former promising a $20.5 million investment in infrastructure improvements, mainly water and sewer extensions.
A Google spokesperson said, “We are proud to be part of the Minnesota community and remain committed to growing the industry and jobs in the state. While this project isn’t progressing right now, that doesn’t rule out engagement on projects in the future.”
With the Google data center gone, Xcel is reportedly in talks with Elk River Technologies and Amber Kestral which are planning a $500 million and $700 million data centers in Becker, respectively.
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