Data Centers in North Dakota
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North Dakota – Low-Cost Power & Tax Incentives
North Dakota offers a compelling economic advantage for large-scale data center operations, driven by some of the lowest power costs in the nation. This market is ideal for companies prioritizing operating expense reduction for high-density compute, storage, and disaster recovery workloads. The state's targeted tax incentives further improve the total cost of ownership for significant infrastructure investments.
North Dakota: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | A focused market with reliable, though not extensive, carrier options. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is via network extension to hubs like Minneapolis or Denver. |
| Power Cost | $0.08/kWh – as of May 2025 | Significantly below the national average; a primary competitive advantage. |
| Disaster Risk | Moderate (71.78 Score) – as of September 2025 | Primary risks are weather-related; lacks seismic or coastal threats. |
| Tax Incentives | Yes | Data center-specific sales and use tax exemptions are available. |
| Sales Tax | 5.00% – as of September 2025 | Base state rate; exemptions on equipment can eliminate this cost. |
Network & Connectivity Ecosystem
North Dakota is a developing connectivity market best suited for workloads that are not extremely sensitive to latency. Its infrastructure provides essential connectivity with room for growth.
Carrier Density & Carrier Neutrality The market has a limited number of providers, with at least 2 data centers available as of September 2025. Carrier neutrality is available, but the ecosystem is less dense than in primary national hubs.
Direct Cloud On-Ramps There are no direct cloud on-ramps within North Dakota as of September 2025. Access to major cloud providers requires network connections to regional hubs such as Minneapolis or Denver, typically via private network interconnects or wavelength services.
Internet Exchange Points (IXPs) Public peering is not a major feature of this market. Most interconnection is handled privately between carriers or established through IXPs in larger, nearby metropolitan areas.
Bare Metal Bare metal server capacity is available in the region. Providers like ColoCrossing can service deployments for customers seeking dedicated, non-virtualized compute infrastructure.
Power Analysis
North Dakota stands out for its exceptionally low power costs and reliable energy grid, making it a prime location for energy-intensive computing.
Average Cost Of Power The industrial electricity rate is approximately $0.08/kWh as of May 2025. This highly competitive price point can substantially lower operational expenditures for data centers. The state's power mix is dominated by coal (55%) and wind (36%).
Power Grid Reliability The power grid is well-engineered and benefits from significant local energy generation. This provides a stable and reliable power supply suitable for mission-critical operations.
Market Access, Business & Tax Climate
The state’s business environment is actively supportive of data center development through targeted financial incentives and access to key regional markets.
Proximity To Key Business Districts Data centers in North Dakota serve the state's primary economic sectors, including energy, agriculture, and logistics. They provide a strategic location for companies operating in the Upper Midwest.
Regional Market Reach From North Dakota, digital services can effectively reach populations and businesses across the north-central United States and into Canadian provinces like Manitoba and Saskatchewan.
Tax Advantage For Data Centers North Dakota offers a significant sales and use tax exemption for qualified data centers. This incentive applies to computer equipment, software, and construction materials, directly reducing the capital expense of building or expanding a facility.
Natural Disaster Risk
North Dakota has a Moderate natural disaster risk profile, with a FEMA National Risk Index score of 71.78 as of September 2025. The primary hazards are atmospheric and seasonal, with no significant seismic or coastal exposure. Key risks include tornados, strong winds, winter weather, and hail.
