When done right, data centers can be community assets

During the 2024 Summer Olympics in Paris, a nearby data center supplied waste heat that kept the pools in the Olympic Aquatics Center warm. It is a vivid example that these facilities, often seen only as power-hungry warehouses, can also be engines of innovation that support communities beyond the digital services they provide.

In Minnesota, where winters are long and cold, heat from data centers could someday warm schools, homes and businesses, cutting emissions and lowering bills. But for every example of innovation, there is also tension about where these projects belong. Local concerns regarding proposed data centers in Minnesota have ranged from noise, traffic and energy use to frustrations over transparency. As community conversations continue about these projects and their potential impacts — from environmental to economic — it underscores why finding strong community use cases is essential to building trust and delivering shared value.

Minnesota is well-known for its industrious spirit and innovative thinking. From high-tech medical devices to world-class agricultural advancements, our state has historically attracted forward-looking industries that create quality jobs and enrich our communities.

Related: New era of confrontation between energy and water opens in Great Lakes

Small- and large-scale data centers now present another opportunity at our doorstep. These facilities are arriving in every corner of the country. We should not treat them as an existential threat but rather approach them as an industry that needs to be carefully integrated into our built environment, towns and neighborhoods so that Minnesotans share in the benefits and are part of the technologies shaping the future.

Data centers, which power the digital services we rely on daily, from streaming videos to artificial intelligence, require substantial investment in infrastructure. While Minnesota has a number of promising project proposals and some work already underway, we are behind the curve. Iowa, Illinois and Wisconsin have already seen an influx of completed investments, often totaling hundreds of millions and even billions of dollars. New projects in our state could bring robust construction phases, local jobs and spending, and long-term operations that help retain talent. Many data center operators are also pursuing carbon-free electricity to meet their substantial power needs, which drives additional investment in clean energy in Minnesota.

These facilities also pose challenges. Minnesota’s law requiring 100% clean electricity by 2040 will necessitate significant new low-cost carbon-free generation and timely investment in critical transmission infrastructure. At the same time, transportation, building and industrial electrification are already increasing power demand, even without new data centers. Water use can also raise concerns, since cooling systems may strain local resources, but new technologies and strategies are helping to reduce that impact. And if data centers are poorly sited or disconnected from community priorities, they risk crowding out other commercial and industrial opportunities.

When properly planned, however, companies pursuing data centers can not only help solve the very challenges they create but provide incredible momentum for financing and building clean energy and water infrastructure. Their strong financial positions can attract private investment in wind, solar and transmission expansion, thereby accelerating our clean energy transition. They can partner with utilities and governments to strengthen the grid for everyone, not just themselves. By capturing waste heat, they can transform an environmental liability into a community asset. With the appropriate energy system integration, data center thermal energy can be used to heat buildings instead of being wasted, reducing both carbon emissions and water consumption.

Local expertise already exists to make these solutions a reality. Ever-Green Energy and others have decades of experience designing campus and community systems that recover heat and lower emissions. Clean Energy Economy Minnesota and its partners can help align the business case for projects that meet community needs and state energy goals. But success requires early and open cross-sector collaboration among data center operators, utilities, state and local governments, and residents.

Related: Data centers consume massive amounts of water – companies rarely tell the public exactly how much

To fully realize these benefits, we must draw on the spirit of cooperation that has characterized Minnesota’s greatest achievements. Public-private partnerships among data center operators, utilities, government, and community stakeholders will be essential.

Minnesota has long been a hub for industrious people to innovate and build forward-looking solutions. From leveraging our skilled workforce to harnessing data center waste heat and investing in a stronger and flexible grid, we now have a chance to lead in yet another wave of sustainable development. In doing so, we can set a new standard for thoughtful, community-based data center collaboration and investment to create new jobs, grow our economy and model what is possible when we partner across sectors to invest in strong transmission infrastructure, clean electricity and innovative waste heat recovery systems.

Luke Gaalswyk is CEO of Ever-Green Energy, and Gregg Mast is executive director of
Clean Energy Economy MN.

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