ELY—Kathryn Hoffman, CEO of the Minnesota Center for Environmental Advocacy, spoke earlier this month to a Tuesday Group gathering about AI data center projects in Minnesota and their environmental implications.
Data centers are already common around the state of Minnesota — “data center” acting as a catchall term for rooms full of computers that store and share data — but the recent trend of hyperscale data centers is new, resulting from the exponentially growing demand for data storage and computational power created by large language models associated with AI.
Hyperscale data centers are recognizable by their enormous physical size, modular scalability, and need to consume enormous amounts of electricity. They use components that allow new additions to be easily added and can individually consume as much power as entire cities.
“It just looks like a warehouse, so you wouldn’t necessarily distinguish it from the outside from Amazon or, you know, some other big company’s warehouse,” Hoffman said.
The hyperscale data centers are also known for their noise, often described as a loud, low hum, as well as their water and use of critical minerals and other resources. Hoffman noted that the high material demand created by the centers drives mining, especially because the chips used in the data centers must be replaced every few years.
The main companies building hyperscale data centers are Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), Meta Platforms, and Oracle Cloud Infrastructure (OCI).
According to Cleanview, a market intelligence firm, there are 30 active data centers within the state. Of these, only two are hyperscale centers: Meta’s two buildings in Rosemount, which have power capacities of 168 MW and 140 MW. According to Hoffman, Minnesota is a potential new location for companies looking to build hyperscale centers, especially as Virginia and Texas — two states that have led the country in data center construction — begin to fill. Minnesota’s availability of water and electricity makes it a prime target.
Hoffman said that it would not take many data centers to massively increase electricity demand in the state, citing a statistic from the Star Tribune which reported that if just ten of these facilities were built, they would consume as much electricity as every household in the state. She warned that the increased energy demand would likely raise energy bills for taxpayers in the state and make it far more challenging for Minnesota to meet its goal of becoming carbon-free by 2040.
Several hyperscale projects have been proposed around Minnesota, although often under the cover of non-disclosure agreements signed with city officials. A lack of transparency has surrounded many of the proposed projects. Hoffman said that a whistleblower was the first to alert environmental groups about the proposals.
“A state employee called us and said, ‘You know what? I’m seeing a lot of places around the state where the cities are wanting a lot more water, in order to provide cooling water to data centers,’” Hoffman said.
One notable example of this practice was in Hermantown, where more than 25 officials signed NDAs related to a proposed Google data center. The NDAs prevented officials from the state, city, county and utilities groups from discussing what was being planned. The Hermantown project is now caught up in a lawsuit over its environmental review as well as a separate zoning lawsuit.
Angela Campbell, a member of Ely’s city council, was at the meeting and clarified during the Q&A session that the Ely City Council has not signed any non-disclosure agreements, nor have any come before the council.
Hoffman explained that the non-disclosure agreements also affect environmental studies by preventing certain information from being shared.
“What that means is that all of that information, like that it’s a data center or how much energy it uses or how much water, is withheld from the environmental study,” Hoffman said. “Well, you can imagine an environmental study that doesn’t even say what the project is, let alone its environmental impacts, is pretty useless to the people that live in that city.”
These problems have been exacerbated by the speed at which companies are attempting to build data centers.
“The desire for speed by the developers and the tech companies behind them has really overwhelmed the ability of cities and the state to sort of effectively manage the impacts because we don’t have laws in place specific to hyperscale data centers,” Hoffman said.
Rep. Emma Greenman, DFL-Minneapolis, tried to pass a bill banning municipalities from entering NDAs that prevent the municipality from disclosing information to the public and requiring municipalities to disclose when they do enter a non-disclosure agreement. The bill stalled last session but could make another appearance this year.
Hoffman said that the Minnesota Center for Environmental Advocacy has two goals as the state sees an influx of hyperscale proposals: to see a democratic and transparent process and to mitigate or eliminate environmental harms.
The group hopes to pass a two-year moratorium on data center projects through the Legislature next session. It also hopes to pass a bill that would require facilities that use large quantities of water to go through additional sustainability and transparency requirements, including a mandatory EIS. There are also multiple proposed bills that would reduce tax breaks that data center developers currently enjoy in the state.
With bipartisan opposition to data center construction, the upcoming legislative session is likely to be filled with data center regulation. With this in mind, Hoffman said that the gold standard would be if companies building data centers had to provide their own green energy.
“Bring your own new clean energy, at least enough to power your data center, and maybe even a little bit more than that,” Hoffman said. “I think that would go a long way towards resolving a lot of these issues, particularly if it’s enough clean energy so that you can do an air-cooled rather than a water-cooled and mitigate those water impacts as well.”