This item reported by The Des Moines Register’s Donnelle Eller came as a breath of fresh air to those concerned about the energy demands of big data centers coming to Iowa.
Facebook says it will begin operating its new data center in Altoona in early 2015 powered entirely by renewable energy that will come from a new wind project in Wellsburg, Ia. …
Iowa has become home to a growing number of massive data centers in recent years, first Google, followed by Microsoft and Facebook. Experts cite Iowa’s low energy costs — and rich incentives — for attracting the tech companies.
At IPP, our research has covered many areas of public policy, but two strong themes that have emerged are these:
- Clean renewable energy such as wind and solar can enhance economic growth in our state; and
- Economic development “incentives” must be designed to pay long-run dividends to the state to truly offer a public benefit.
Iowa won the bidding war with Nebraska not because we gave away more taxes but because we had more wind power. Facebook had a deal with environmental organizations to stop being a dirty energy hog so they came to a place where they could easily get wind power. And all that wind power in Iowa (24.5 percent of the total electricity generated last year was from wind) has not caused our overall electric rates to spike. So other companies like the Iowa environment as well. Clean energy seems to get us more high quality jobs.
Most of the “rich incentives” in Iowa’s economic development playbook do not incentivize anything that would not happen anyway because they are focused on tax breaks for companies that pay little or no taxes in the state to begin with, and in any event are such a small part of business costs that they have little bearing on location decisions.
But clean energy does matter. The promise of renewable energy, such as wind power, rests with the recognition that as we invest in new energy sources to meet demand of the future, we can do so in a way that does not harm our environment and keeps energy costs down over the long term.
In this case, Facebook is following a course, beyond giveaways, that more companies should consider when thinking about where to locate or keep operations.