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$1B Data Center Campus Planned At Closing Power Station

Xcel Energy's Sherco Generating Station in Becker, Minnesota

A developer is planning a $1B data center campus next to a closing coal-fired power plant in Minnesota, the third such project planned for the area.

Xcel Energy is selling 348 acres next to its soon-to-be-shuttered power station in Becker, Minnesota, to a data center developer, the Minneapolis Star Tribune reports

This would be the second campus-scale data center project planned for the land around the Sherco Generating Station and the third in the region, bringing a potential wave of hyperscale development to a market that until recently was off the digital infrastructure radar.

"It's a pretty big deal for Xcel, and it is a big economic development project [for the area]," said Sherburne County Administrator Bruce Messelt, according to the Star Tribune. 

Little is known about either the developer or potential end user for the planned campus in Becker, located midway between the cities of Minneapolis and St. Cloud. Speaking with the Star Tribune, Xcel Energy would say only that the developer plans to invest $1B in the site, will employ more than 100 people and that the land will not be used for cryptocurrency mining.

In filings with state regulators, Xcel indicated the land is being sold for $7.7M to a shell company called Elk River Technologies. The use of shell companies to mask the identity of a potential end user is common practice in the data center space. 

The development site is part of a larger property on which Xcel Energy currently operates the coal-fired Sherco plant, due to be fully decommissioned by 2030. The company is also building a solar farm on the site and has been actively courting data center development on its adjacent land.

In 2019, Xcel agreed to sell 300 acres next to the Sherco power station to Google, which plans to build a $600M data center facility. That project, which would abut the Elk River Technologies campus, has yet to come to fruition, although both Google and Becker officials insist it is still moving forward, according to the Star Tribune.

In addition to the proposed projects in Becker, CloudHQ announced in August that it is planning a 1.5M SF data center with 180 megawatts of capacity in the town of Chaska, on the outskirts of Minneapolis. Construction on the $1B project is expected to begin in 2023.

The addition of three major hyperscale campuses would significantly move the needle in a market that has remained a relative backwater for the data center industry. According to CBRE, the Minneapolis area has only around 59 megawatts of total data center inventory, with around 10.5 megawatts currently under construction. The proposed build-outs in Chaska and Becker would dramatically increase that figure.

Related Topics: CBRE, Google, Xcel Energy