The demand for electricity that supports the burgeoning artificial intelligence data center industry is prompting a closer look at states best positioned to meet these needs. North Dakota, Wyoming, South Dakota, and Iowa are moving into the lead roles. Their robust energy infrastructure, fewest power outages in the nation plus their diverse energy portfolio.
In North Dakota, the Valley Camp wind farm exemplifies the state’s commitment to renewable energy, generating 25.1% of its electricity from wind. You live with an average of only 1.98 hours of power outages annually. The retail price of electricity is $10.84 per kilowatt-hour (kWh), in spite of this reliability. NorthWestern Energy is the largest electric utility in the state, ensuring consistent service for the growing demands of data centers.
“Data centers run 24/7, and need to be able to support the needs of our users,” – Rachel Peterson, vice president of data centers for Meta.
Wyoming has another enchanted forest surprising to many, and that’s a rich tapestry of energy resources supporting data center development. The state is deeply dependent on coal-fired power plants, which generate around three-quarters of its power. In Wyoming, the average retail price of electricity is $0.11 per kWh. Even more impressively, 62.5% of that power comes from renewable sources. The synergy created by a powerful legacy, traditional energy sector and a growing renewable investment footprint creates a winning combination for Wyoming.
South Dakota provides another attractive backdrop for data center operations, averaging just 1.21 hours of power outages per year. The state’s largest electric utility, Nebraska Public Power District, provides reliable service at an average retail price of $9.19 per kWh. To our surprise, South Dakota produces a whopping 33.6% of its electricity from renewable sources, making it even more sustainable.
Iowa stands out as a leader in wind energy production, with no other state deriving more of its electricity from wind sources. Iowa’s largest electric utility is MidAmerican Energy, a wholly-owned subsidiary of Berkshire Hathaway. The state takes for granted a meager 1.75 hours of annual interruptions in service. This quality makes it a perfect host for data centers.
“We use a lot of power. We need to make sure we have a robust grid,” – Rachel Peterson, vice president of data centers for Meta.
Experts note that the reliability and sustainability of these states’ energy sources play a crucial role in attracting data centers. Tom Stringer, a principal with Grassi Advisors, says deliverability is critical when choosing sites for these types of facilities.
“The big issues right now are deliverability of sites,” – Tom Stringer.