Meeting the demand for data centers « Back to Search Results

Most people don’t realize that all day long, as we access the internet to download and send emails, stream television shows or play online games, we’re using and generating data.

All of this information has to be stored somewhere. Contrary to popular belief, even when media are stored in the “cloud,” data still resides in a physical place in a remote location. We’re just accessing the data via the host servers of cloud providers.

Data centers are large technology hubs that house networks of computers and servers, which store and process data. As the need for fast and reliable access to data rises, the demand for data centers has become more critical.

Great River Energy launched a data center site certification program in 2014 to pinpoint ideal sites for data center development in its 28-member service territory in Minnesota.

The second largest member of Great River Energy’s distribution co-op network, Dakota Electric Association, is now in the process of certifying three sites in its service area, which includes Dakota, Goodhue, Scott and Rice counties.

Mark Lofthus, Dakota Electric Association economic development director, says hosting a data center can have great benefits to both the electric co-op and the community.

“The electrical load of a data center is high but it’s also consistent and predictable, which makes it a great customer from the standpoint of the co-op,” Lofthus said. “The large load from a data center can help underwrite the cost of the whole electrical grid, which helps keep rates lower for everyone.”

Site certification is a complex and expensive process, requiring a multitude of tests such as environmental assessments, archeological surveys and soil sampling. The goal is to reduce risk and uncertainty for prospective data centers.

Data centers have a host of stringent site requirements to mitigate potential disasters since they’re trusted to keep important information safe and secure. Locating on a floodplain could be disastrous, for example, as could close proximity to an airport runway, rail line or nuclear power plant.

Good sites for data centers have access to high voltage transmission lines because they require a lot of power to operate and need multiple sources of power for backup capabilities.

Data centers are low emission and low profile facilities that bring in good jobs. Since they’re tasked with providing security for customer data, many don’t even list a name on the building. They bring in quality technology, management and support jobs that pay well and require some level of training.

Telecommunication and fiber optic providers are attracted to data centers, which helps existing area businesses and residents. Robust fiber can help draw other businesses to the community too.

Energy costs account for the largest portion of a data center’s operating budget, which means companies are continually looking for ways to conserve energy. The co-op is a great resource in this endeavor. Dakota Electric Association assigns account managers to work with members to evaluate efficiency and help companies get rebates for new equipment. The results are mutually beneficial; the data center is able to operate more efficiently, and the co-op gets a boost in meeting annual conservation goals.

Minnesota passed legislation to support data centers and initiated a program to aid their development. The state offers significant savings through sales tax exemptions on electricity, equipment and software for projects meeting the minimum size and investment threshold.

Building a data center requires a big capital investment from the company, which is a boon for the communities they choose. “These are companies that are going to be around for a long time, due to the cost of their investment,” Lofthus said. “For a city of any size, data centers represent a great addition to the tax base.”


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CapX2020, led in part by Great River Energy, has built more than 700 miles of new high voltage electric transmission lines in Minnesota, delivering affordable, reliable electricity.