Data Centers, Energy and Water

Evaluating the Local Impacts of Minnesota’s Growing Data Centers

As of 2023, data center energy use represents about 4.4 percent of total U.S. electricity consumption. Recent estimates suggest that by 2028 this could increase between 6.7 and 12 percent – a rapid increase at an accelerating rate. Data centers rely on water for cooling; nationally, one-fifth are located in moderately to highly stressed watersheds, and about half rely on electricity generated in water-stressed areas. And yet: There is limited information available on how data center development may impact local resources and provide local economic opportunities. As the number of data centers is expected to grow in Minnesota, the need to understand the local tradeoffs between high water and energy demands for data centers alongside workforce, tax or other benefits will only become more important.

This project aims to provide tools to evaluate data center development and initiate conversations among collective governance bodies about managing the high energy and water demands of data centers. 

Project Goals

• Produce a data center toolkit outlining best practices for city administrators facing data center development decisions
• Develop three public-facing briefs for community members to use in future conversations and decision processes: anticipated data center impacts; state and local policy guide; managing common pool resources for data centers
• Publish a law review article on the implications of data center development for the electricity system and a peer-reviewed journal article based on scenario exercises centered on local government decision-making