director of strategy and operations for Google’s global data centers, speaks to a crowd of some 100 attendees at the technology company’s groundbreaking in Dorchester County Thursday, Sept. 26, 2024. (Jessica Holdman/SC Daily Gazette)
RIDGEVILLE – Google broke ground Thursday on a pair of data centers in Dorchester County, publicly announcing for the first time an investment of $2 billion that will employ 200 people. The Alphabet Inc. subsidiary also said it will spend $1.3 billion to expand its Berkeley County center.
The tech giant took the opportunity to firmly plant its flag in South Carolina, even amid Statehouse discussions surrounding the massive energy needs of data centers and the new power plants utilities say are necessary to both serve a growing state and wean it off coal-fired power.
“This investment is a testament to Google’s long-term commitment to this region,” Audrey Van Belleghem, director of strategy and operations for Google’s global data centers, told some 100 attendees gathered under a tent in anticipation of rain from Hurricane Helene.
Cranes on the site of a new Google data center in Dorchester County on Thursday, Sept. 26, 2024. (Jessica Holdman/SC Daily Gazette)
Alphabet, Google’s owner, and other major technology companies such as Meta, the parent company of Facebook, have invested heavily in data centers needed for their artificial intelligence ambitions.
“We are at an early stage of what I view as a very transformative area and in technology,” CEO Sundar Pichai said in an earnings call with analysts on July 23. “When we go through a curve like this, the risk of under-investing is dramatically greater than the risk of over-investing for us here.”
The new centers under construction will bring Google’s tally to three in South Carolina. It has built or has plans for three in Nebraska, two in Nevada and a dozen more largely across the South and Midwest.
A deal on power
What has caused some alarm is a deal struck between the California-based tech firm and power company Dominion Energy, which will supply power to the new data center near Ridgeville at a discounted rate less than half of what residential customers pay.
It’s not unusual for commercial and industrial users to pay less.
According to the U.S. Energy Information Administration, residential customers pay an average of 14 cents for a kilowatt hour of energy in South Carolina, compared to 11 cents charged to commercial users and about 8 cents charged to industrial. The deal with Dominion took Google down to 6 cents.
“Even though they’re paying a rate 60% below, they’re consuming so much power that they’re paying a substantial amount of money to the utility,” state Commerce Secretary Harry Lightsey said during a special committee hearing at the Statehouse last week in response to concerns raised by Sen. Chip Campsen, R-Isle of Palms.
“Having that money available, instead of just having to get that money from residential customers, is a significant benefit,” Lightsey said.
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Dorchester County Council last year also approved tax breaks for the California-based company, reducing property taxes to a 4% rate typically reserved for owner-occupied homes in the state. The deal is good for up to 53 years.
Google hasn’t disclosed how much water the data center will use to cool its servers, calling that a trade secret. The secrecy prompted a lawsuit from a Charleston County resident. That case is pending.
“When it comes to energy, we will pay our fair share,” said Lilyn Hester, head of southeast external affairs and government relations for Google, told reporters Wednesday.
“And when it comes to data centers, we can build anywhere in the world,” she continued.
But those projects come with billion-dollar price tags.
“So, when the state offers these incentives, like any other company, we will take the state up on those opportunities,” Hester said.
‘The right project’
At the Thursday event, Google also touted a $1.6 million donation it’s making to improve energy efficiency for low-income households in both South Carolina and North Carolina and a $600,000 donation to pay for conservation projects in the Palmetto State.
The Sustainability Institute, a North Charleston nonprofit focused on energy efficient homes and buildings, also highlighted Google’s work alongside South Carolina utility companies to bring on 128 megawatts of new solar energy and battery storage to help power the centers.
“This is the right project for Dorchester County,” said County Council Chairman Todd Friddie. “It brings an enormous amount of tax dollars to our school district and for the county, with very little impact to our roads and to our school district.”
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Construction on the two new centers will take a year to 18 months, Hester said.
The 200 new jobs will be a mix of maintenance and security roles, as well as computer technicians and engineers. Those workers join the more than 400 employed at the Berkeley County center.
Officials did not provide a breakdown of jobs or their pay.
Though the job count is less than many of the major manufacturers in the state, Lightsey told lawmakers last week that’s what makes these centers a good fit for more rural counties that don’t have the workforce necessary for companies like Boeing or Scout Motors.
The groundbreaking was between rural Ridgeville and the fast-growing Charleston suburb of Summerville.
Other benefits
Legislators last week also heard from data center operator DC Blox, which will eventually have three centers in the state — a nearly $2.5 billion investment, according to CEO Jeff Uphues.
Uphues spoke to the benefits of DC Blox having a presence in cities such as Spartanburg and Myrtle Beach.
He said his company covered the cost of electric substations and upgrades to power lines worth tens of millions of dollars that are benefiting other companies locating near the Berkeley County center it has under development.
In Myrtle Beach, he said, other technology companies are now coming into an industrial park that sat empty for a decade. And while he did not mention BMW by name, he said his company’s contract with a “global automobile manufacturer” kept the Spartanburg carmaker from moving its technology department out of state in 2019.
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“If we chose to somehow say that we were not going to allow data centers to locate in our state, that would send a signal that we don’t really understand what the future would be as those types of resources become increasingly important,” Lightsey said.
Besides, he added, federal restrictions mean power companies will need to shut down their coal-fired power plants in the state and that electricity will need to be replaced.
“The bottom line is, there is going to be a need for additional generation capacity, regardless of whether data centers locate in South Carolina or not,” he said.