Google signs AES, Xcel supply deals to meet data-center energy needs
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The Google logo is seen during Kering Innovation Day 2026 at the company’s headquarters in Paris, France, January 22, 2026. REUTERS/Gonzalo Fuentes
Feb 24 (Reuters) - Alphabet's Google doubled down on efforts to secure power supply for its data centers across the country by entering into separate agreements with U.S. utilities, AES Corp and Xcel Energy, on Tuesday.
Big Tech firms have been scouring for new, reliable and cleaner energy sources to power their rapidly expanding data centers, which have been driven by increasing use of artificial-intelligence applications.
To meet the surging demand, utilities have been investing heavily to upgrade the country's grid, though this has raised concerns about increasing customer bills.
Xcel entered into an agreement to power Google's new data center in Pine Island, Minnesota, while bringing 1,900 megawatts of new clean energy to the grid.
The utility said the project would not raise costs for existing customers, as Google will pay all costs for its new service.
The project would add 1,400 MW of new wind energy capacity, 200 MW of solar power and 300 MW of long-duration energy storage. Google will also invest $50 million in Xcel's efforts to build a battery storage network across Minnesota.
Meanwhile, Arlington, Virginia-based AES said it had signed a 20-year agreement with Google to power a new data center in Wilbarger County, Texas.
AES signed deals for energy generation that will be co-located with the new data center and enable Google to expand its operations to meet demand for its core services.
The utility will build the necessary shared electricity infrastructure for the co-located facility.
Google had previously signed a deal with NextEra Energy to build new energy supplies for its operations across the U.S.
NextEra and Google currently have 3.5 GW of electricity generation - enough to power about 2.5 million homes - in operation or contracted.
Other major U.S. utilities including Southern Co and AEP also count Google as their customer.
Meta, Microsoft and Amazon's Amazon Web Services have also signed several power supply deals with U.S. utilities.
(Reporting by Katha Kalia in Bengaluru, additional reporting by Vallari Srivastava; Editing by Vijay Kishore and Leroy Leo)
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