A recent Forum article, “NDSU researcher separates fact from fear on data centers,” raises an important point: The impact of data centers depends greatly on how and where they are built. As North Dakota considers the opportunities and challenges presented by this rapidly growing industry, another part of the conversation deserves attention: the role our state’s existing energy resources, particularly lignite coal, can play.
Large data centers require enormous amounts of electricity delivered reliably around the clock. North Dakota is uniquely positioned to meet that demand. Our lignite mines and power plants already provide dependable, affordable, 24/7 electricity, supported by a workforce, infrastructure and fuel supply located right here in our state.
Connecting new large loads to North Dakota’s lignite industry would create benefits that extend well beyond the data centers themselves. Additional demand for coal-based electricity could provide greater certainty for existing power plants and mines, helping preserve thousands of jobs and significant economic activity. Those loads could come from data centers, manufacturing facilities or critical minerals processing operations. Each would bring new investment and employment while strengthening the industries and communities already rooted in coal country.
A recent study commissioned by the Lignite Energy Council examined what that connection could mean in practical terms. One scenario paired a lignite power plant with a data center. The analysis found that development on that scale could generate about $4.5 million each year in additional county property tax revenue. That comes on top of the economic value created by keeping a baseload power plant operating, supporting continued coal production and sustaining the jobs and local spending tied to both.
The benefits would also reach local businesses, contractors and coal-producing counties. Every ton of coal mined or converted in North Dakota generates tax revenue for the state and counties. Stabilizing coal use would help provide a steadier stream of revenue for county and local budgets.
North Dakota’s investor-owned and cooperative power providers have already taken steps to ensure that new data centers do not impose costs or reliability risks on existing customers. “Bring your own power” programs require prospective developers to provide or pay for the additional generation needed to serve their facilities. This approach protects other ratepayers from higher electricity costs and helps prevent new data centers from straining the grid during periods of peak demand. It also creates an opportunity for developers to invest in new lignite generation or form partnerships that support the continued operation of existing plants.
Utilities, regulators and investors around the country are increasingly recognizing the value of coal-fired power plants that deliver reliable electricity to the grid. Just a few years ago, the coal industry was defending itself against federal regulations intended to force widespread plant closures. Today, rapidly growing electricity demand has renewed interest in preserving dependable generation and keeping every available electron on the grid. That shift gives North Dakota’s lignite industry an opportunity not only to remain strong, but to grow.
North Dakotans should absolutely ask thoughtful questions about data center development, including questions about infrastructure, water use, electricity costs and effects on neighboring communities. But we should also recognize the opportunity before us. With an 800-year supply of lignite coal and an established fleet of reliable power plants, North Dakota has something the data center industry desperately needs: dependable electricity available regardless of the weather or time of day.
Jonathan Fortner
Lignite Energy Council
President & CEO