Mega data centers are coming to Minnesota. Their power needs are staggering.

Facebook’s parent company is building Minnesota’s first mega data center in Rosemount to house its fast-growing need for computing muscle.

Amazon and Microsoft bought land for large data centers near Xcel Energy’s soon-retiring coal plant in Becker. A Colorado company called Tract has advanced a project in Farmington and is eyeing colossal sites in Rosemount and Cannon Falls. Other companies want to build data centers in Chaska, Faribault, North Mankato and Hampton.

If built, this crop of data centers could demand as much electricity as every home in Minnesota.

State and local officials as well as electric utilities are grappling with how to manage this explosive growth while keeping the lights on and complying with laws for a transition to clean power.

Lagging power supply on the 15-state regional grid has spurred warnings of blackouts starting this summer. The data centers are already raising concerns about whether they will prolong the burning of fossil fuels for electricity even as Minnesota requires a carbon-free grid by 2040.

“There’s so many different utilities and industries and businesses who have done a lot of work on decarbonization in Minnesota,” said Amelia Vohs, climate program director at the Minnesota Center for Environmental Advocacy (MCEA). “It feels a little bit like this one industry has a real possibility to significantly erode that.”

Still, many state and local officials welcome the projects, which could shower Minnesota with new carbon-free power infrastructure, construction jobs, tax revenue and, potentially, lower electric bills for everyone.

The server farms are critical to services such as medical records, financial transactions, streaming media, navigation apps, email and remote work. The average household has 21 devices connected to the internet, from watches to bird feeders. The rise of artificial intelligence products has accelerated the construction of these centers, massive buildings that house banks of computers using enough electricity to power cities.

“All of that is generating and consuming more and more data than ever before,” said Aaron Tinjum, vice president of energy for the industry trade group Data Center Coalition. “It’s an industry that has really become, effectively, the lifeblood of our modern economy.”

Interviews with two dozen people representing data center companies, local officials, environmental nonprofits and electric utilities, as well as public records, shed new light on the size and scope of these projects in a planning process that developers often make intentionally opaque.

Minnesota was not a large data center market in the past. Meta Platforms’ project in Rosemount is the farthest along in what could be a surge of large-scale projects. At least nine other facilities are in development.

Some cite lower cooling costs from Minnesota’s weather, access to fiber infrastructure, the Twin Cities’ strong workforce and proximity to the large metro area. Xcel is one of many to argue the state’s carbon-free law is a boon because tech companies want to meet their own climate goals.

Helping to draw these data centers are state tax breaks on energy sales, equipment and software enacted in 2011. It started as a relatively small program worth about $7.3 million a decade ago. It has since grown to often more than $100 million annually — before the arrival of colossal data centers.

About three dozen states have tax breaks for equipment and are “table stakes” to attract big data centers, said Tract’s chief investment officer Graham Williams.

Williams said data centers are popping up in Minnesota after becoming too concentrated in places like Chicago and Virginia, where companies are fighting for real estate and resources like space on congested power lines.

“What they realized is they have to have some outlets for that, for future growth,” Williams said.

Minnesota may be a secondary market for data centers, but the centers’ power needs would still be massive.

Xcel anticipates supplying data centers with 1,300 megawatts in Minnesota and the Dakotas over the next seven years. Great River Energy, a Maple Grove-based nonprofit, is planning 1,000 megawatts of new demand in a similar time frame.

That amount of power demand between Xcel and Great River would be roughly equivalent to Minnesota’s 2.3 million households.

Xcel is building one of the nation’s largest solar farms in Sherburne County, a project seen as a landmark for carbon-free progress in Minnesota. That can generate only enough electricity for 150,000 homes.

Even before the data center boom, utilities were preparing for higher demand as people switch to electric vehicles and home heating systems.

Minnesota in 2024 made it faster to permit and build clean energy. Still, it can take several years to build wind and solar projects and as much as a decade for large transmission lines to carry electricity.

“My analysts are skeptical about rapidly delivering power of any sort, much less clean power, in the size and time frames that the data centers are likely to request,” Pete Wyckoff, a deputy commissioner at the Minnesota Department of Commerce, told utility regulators in October.

In February, Xcel announced plans to add more than 3,000 megawatts of new wind energy by the end of the decade, plus a major amount of solar and batteries. Now the company says it might need more. But Xcel said it can still follow through with closing its two big coal plants and comply with Minnesota’s 2040 carbon-free deadline.

Xcel’s long-range plans include a new natural gas “peaking” plant in Lyon County which would kick in during hot summer days or other high-need times. The new data centers make Xcel more likely to extend some contracts to buy electricity from third-party gas plants into the 2030s, said Ryan Long, Xcel’s president in Minnesota.

In March, the PUC approved Great River’s plan to shift from having about a third of its power from carbon-free sources last year to 90% by 2035. The data center demands mean that plan is already outdated, according to Zac Ruzycki, director of resource planning for Great River. Great River will have to build or buy extra power that might include gas despite a surplus of electricity on its system now, Ruzycki said.

Ruzycki noted Minnesota’s 2040 law allows utilities to burn fossil fuels to maintain a reliable system and account for those emissions by purchasing renewable energy credits for clean power elsewhere.

Still, some believe data centers — and the deep pockets of their owners — will ultimately help the switch to carbon-free power.

Google told the PUC in October it’s buying the power from a geothermal plant in Nevada, and the tech industry has purchased a tremendous amount of renewable electricity across the country.

Beyond wind and solar, some data center companies are paying to revive nuclear plants such as Three Mile Island in Pennsylvania or investing in emerging technology for smaller reactors.

The data center companies most interested in Minnesota “don’t want to show up and have somebody build a gas plant to serve them,” said Audrey Partridge, director of policy for the nonprofit Twin Cities-based Center for Energy and Environment. “That would be a problem for them at the corporate level.”

No tech companies have publicly committed to building major clean power projects with local utilities so far in Minnesota.

Vohs, with the MCEA, said it would be a “huge gift to our electric system” if data center owners did that, but it’s not required.

Meta says it will buy enough renewable energy to account for any fossil fuels burned for its Rosemount project. But that might not directly help Xcel, its climate goals or its customers. Xcel spokesman Theo Keith said Meta plans to purchase renewable energy credits. Their electric contract does not require Meta to build anything specifically for the power company.

Vohs is among those who note a Wisconsin utility wants to build more natural gas generation to help supply data center demand. A massive Meta AI data center in Louisiana would need three new natural gas plants.

Tract’s chief energy officer Nat Sahlstrom said in the short term “you’re going to need to have net new gas built” to keep the grid steady, even as tech companies push to add cleaner power.

“It’s a transition,” he said. “We’re going to have to go look at the tradeoffs.”

In Becker, Amazon wants to build 250 emergency backup diesel generators capable of producing nearly as much power as Xcel’s Monticello nuclear plant in case of a grid outage. The data center developer Oppidan might install several hundred diesel generators at its project in Hampton.

Republican lawmakers, a segment of DFLers, and the state’s rural electric cooperatives want the Minnesota Legislature to lift a state ban on new nuclear plants. Some believe Minnesota should add more fossil fuels or keep existing coal plants open in light of a projected regional shortfall in electricity supplies over the next five years.

The spread of data centers brings other challenges. Some use huge quantities of water. People don’t want to live near them. They can be noisy.

In Farmington, residents sued the city in an effort to stop Tract’s sprawling data center campus. In Hampton, home to 700 people, dozens packed the small city council chambers Tuesday night, poring over maps and pressing for more information about the 140-acre project.

“I don’t think we can sacrifice that much water,” said Leo Nicolai, who has a lawn mower repair shop and home next to the proposed site. “It’s not good for the community at all.”

Electric utilities say planning when to build expensive new power plants for data centers is difficult because some never materialize. Projects that are announced publicly sometimes aren’t built. In 2022, Google pulled out of a $600 million data center in Becker announced two years earlier.

State officials, the PUC and utilities are hashing out ways to ensure data center companies aren’t hurting customers and clean-energy goals.

Xcel said new large industrial customers can lower prices for others by spreading out the fixed costs to build and maintain its system. The PUC agreed Xcel’s contract with Meta in Rosemount would help other customers.

And even with the risks of data centers, many welcome the jobs and revenue they bring.

Tract’s Farmington campus would be a $5 billion construction project. Meta’s project would cost $800 million to build, and CloudHQ estimated its Chaska data center at $1 billion.

Earlier this year, Xcel’s Long told a conference of utility regulators in Minneapolis that data centers enable AI technology that can help solve problems. Xcel uses it to help mitigate wildfire risk in Colorado. “It’s not all just cat videos,” Long said.