Xcel–Google Pact Brings 1.9 GW of Clean Power, Iron-Air Battery to Minnesota

Xcel Energy is set to power a new Google data center in Pine Island, Minnesota, a project expected to deliver a significant boost to the state’s economy. In a press release, Xcel Energy said the data center and the associated Electric Service Agreement will make a meaningful economic contribution.

As part of the agreement, Xcel Energy and Google are partnering to bring 1,900 megawatts (MW) of new clean energy to the grid. In addition, Google will cover all new grid infrastructure costs linked to the project and has worked closely with Xcel Energy to ensure electricity in the area remains reliable and affordable for all customers.

A Clean Energy Accelerator Charge (CEAC) will support the addition of 1,400 MW of wind power, 200 MW of solar capacity, and 300 MW of long-duration energy storage, along with a $50 million investment in Xcel Energy’s Capacity*Connect Program to strengthen grid reliability. The new generation capacity will help advance Xcel Energy beyond its current energy mix, which already includes 70% carbon-free electricity.

The clean energy resources funded under the agreement include a 300-megawatt (30-gigawatt-hour) iron-air battery system from Form Energy — the largest battery project by gigawatt-hour energy capacity announced globally to date. This 100-hour battery system will store energy during periods of high production and low demand and dispatch it during times of peak demand, providing firm capacity and enhancing grid reliability when it is needed most, even across multiple days.

The project also involves a large build-out of new clean energy assets that will support Minnesota’s clean energy goals while ensuring Xcel Energy’s existing customers benefit from this growth.

Data Centers

Data centers serve as the core infrastructure powering the internet, supporting everything from personal electronics to business operations and government services. Xcel Energy recently signed an agreement to supply power for Google’s data center, which will support essential services including Workspace, Search, YouTube, and Maps, used daily by individuals, communities, and businesses.

Xcel Energy said it is committed to ensuring that new large electricity loads do not increase costs for existing customers and that service reliability is maintained. Under the agreement, Google will pay all costs associated with its new service, in line with standard practices and Minnesota’s regulatory and legislative requirements for large loads. Over the past five years, Xcel Energy’s average Minnesota residential customer’s electric bill was 27% below the national average. Since 2013, residential electric bills have risen by 1.55% annually, well below the rate of inflation.

Leadership View

The Electric Service Agreement will be filed for review with the Minnesota Public Utilities Commission in the coming weeks. The MPUC must formally approve the agreement between Xcel Energy and Google to supply power to the site.

“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. “This unique agreement is a model for data center partnerships in that it fulfills and protects Minnesota’s goals for a carbon-free future and drives investment deep into our communities — all while ensuring our current customers are not paying more for this growing demand.”

“Our commitment to Minnesota goes beyond building infrastructure; it’s about being a responsible partner, neighbor, and a good citizen of the grid,” said Amanda Peterson Corio, head of Data Center Energy at Google. “This agreement supports our goal of expanding AI and cloud capabilities in a way that provides long-term value to the places we operate. By integrating new carbon-free energy and pioneering long-duration storage with Xcel Energy, we are helping to build a more resilient system that benefits the entire community.”

“Data centers are critical tools for economic development and growth in our state,” said Doug Loon, president and CEO of the Minnesota Chamber of Commerce. “Last year’s law that extended incentives for operation of data centers while balancing environmental considerations like water and energy use is a model for other states. 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.”