Google, Xcel Energy ink clean power deal in Minnesota

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: February 24, 2026

Key Moments

Xcel Energy will supply power to Google’s new data center in Pine Island, Minnesota, with 1,900 megawatts of new clean energy planned for the grid.
The project is structured so that existing Xcel customers will not see higher costs, as Google will cover all expenses tied to the new service in accordance with Minnesota rules for large loads.
The initiative includes 1,400 MW of new wind capacity, 200 MW of solar, 300 MW of long-duration storage, and a $50 million investment in Xcel’s Capacity*Connect program.

Partnership Overview

Feb 24 (Reuters) – Xcel Energy said on Tuesday that it has entered into an agreement with Google to supply electricity for the technology company’s new data center in Pine Island, Minnesota. As part of the arrangement, Xcel plans to add 1,900 megawatts of new clean energy to the regional grid.

Rising Power Demand From Data Centers

U.S. electricity use is expected to climb rapidly through this year and the next, driven by the expansion of data centers supporting artificial intelligence applications and cryptocurrency, along with increasing electrification of heating and transportation in homes and businesses.

Utilities across the country have been committing billions of dollars to modernize and expand the electric grid to keep up with this demand growth. These investments have, however, sparked concerns about potential increases in customer bills.

Cost Structure and Customer Impact

Xcel Energy stated that the Pine Island data center project will not result in higher costs for existing customers. Under the structure of the agreement, Google will be responsible for all expenses associated with its new service, and this cost recovery will follow Minnesota’s regulatory and legislative framework for large-load customers.

Clean Energy and Storage Additions

According to Xcel, the initiative tied to the Google data center includes significant new clean energy and storage resources:

Component	Planned Capacity / Investment
New wind energy capacity	1,400 MW
New solar power	200 MW
Long-duration energy storage	300 MW
Capacity*Connect program investment	$50 million

Xcel said these additions are part of the broader project linked to powering the Google facility, aligning the data center’s electricity needs with new clean energy resources and grid support.

Google’s Broader Power-Sourcing Strategy

Alphabet’s Google has been intensifying its efforts to secure power sources for its data center footprint across the United States.

Earlier in the day, AES Corp announced that it had signed a 20-year agreement with Google to supply electricity to the company’s planned data center in Wilbarger County, Texas.

Last week, renewable energy provider Ormat Technologies said it had reached a long-term geothermal power purchase agreement with NV Energy to support Google’s operations in Nevada.