Manitoba to Data Centers: No Thanks!

Last year we reported that a number of large data center builders were investigating Manitoba as a location for power-hungry server farms. With power costs driving many data center site location processes, and corporate mandates for “green” facilities, the central Canadian province’s ample supply of affordable hydro and wind power is attractive. In early 2008 Manitoba Hydro was approached by several name-brand data center builders.

Although data center companies are interested in Manitoba, it turns out Manitoba isn’t much interested in data centers. That’s the word from Manitoban blogger Rod Edwards. “I called the provincial department of Science, Technology, Energy and Mines (STEM), and had a very nice conversation with a representative who told me that Manitoba had, in fact, been contacted by a number of large datacenter investors, and that we had declined to compete for their investments,” Edwards reports.

It turns out Manitoba Hydro would rather sell its power outside of the province where it can do so at higher rates. Large power customers in Winnipeg paid an average of 3.6 cents per kilowatt hour in 2007, cheaper than the average rate in virtually every state in the U.S.

Edwards said Manitoba officials also weighed the staffing benefits. Data centers can typically operate with 50 to 200 workers, far less than large manufacturing operations. “The Province chose to focus its competitive energy on industries that employed more people directly, like call centers,” Edwards writes.

That approach stands in contrast to most economic development agencies in the United States, which are competing hard for data center projects with tax incentives.