Pretty much everything you do on the internet runs through a data center.
Watching Netflix, online shopping, Google searching something – all of that virtual information has to be stored and processed somewhere physical.
That’s where a data center comes in. It’s essentially a warehouse for computer servers, each processing thousands of data points for transactions and algorithms worldwide.
And all that processing power requires a lot of energy.
That’s drawing the attention of Virginia officials, as the state faces a boom in data center construction and proposals.
Virginia has long been a global hub for the industry. But the rise of data-hungry artificial intelligence is driving an explosion in data center construction both statewide and across the country.
State and local economic development officials often welcome and attract these facilities with tax incentives. But environmental groups, lawmakers and others worry this spike in energy demand could undermine the state’s efforts to move away from burning fossil fuels that drive global warming.
“We are absolutely not producing enough energy to power these things, much less clean energy,” said Tim Cywinski, a spokesperson for the nonprofit Sierra Club in Virginia.
The tech industry says it tries to source from and invest in renewable energy whenever possible.
What’s clear is that data centers will help shape the region’s energy landscape for decades to come — prompting investments in both renewables and gas infrastructure.
Why are data centers so focused on Virginia?
Virginia has become a data center powerhouse. About 70% of the world's internet traffic runs through Northern Virginia alone.
The hub was first seeded decades ago when Loudoun County just outside Washington launched economic and tax incentives to attract data processing companies, said Raj Chudgar, chief power officer for EdgeConnex, which operates data centers in Norfolk and Richmond.
The area also became a strategic location because of its proximity to the political and financial hubs of Washington and New York City, Chudgar said.
The Commonwealth is now home to more than 200 data centers. Several are in Hampton Roads, including EdgeConnex at the Norfolk Industrial Park and at least four at Virginia Beach’s Corporate Landing Business Park.
More of the facilities are on the way, cementing Virginia as the place with the world’s highest concentration of data centers. Amazon Web Services last year announced it plans to spend $35 billion to build multiple data center campuses across Virginia.
Gov. Glenn Youngkin has worked to expand the industry in Virginia, citing economic benefits from the businesses’ capital investments and local tax revenue. The administration proposed developing a Mega Data Center Incentive Program that would include extending related tax credits for 15 years.
The U.S. needs many more of the centers to accommodate society’s shift to high-performance computing, especially artificial intelligence, Chudgar said.
“The amount of storage and the amount of processing has exponentially increased,” Chudgar said. “But in order to do that, you have to have more data centers.”
Local officials are grappling with how to handle the exponential growth. Dozens of bills have been proposed but mostly stagnant at the Virginia General Assembly.
“I just want my kids and grandkids to live in a community where the data centers aren’t harming them in any sort of way, and that they’re not getting in the way of us addressing bigger problems like climate change,” state Sen. Suhas Subramanyam, who represents Loudoun County, told the Virginia Mercury during the most recent legislative session.
Prompted by state lawmakers, the Virginia Joint Legislative Audit and Review Commission is working to study the issue. The report is expected in December.
Josh Levi, president of the Data Center Coalition industry group, said in previous statements that its members are “committed to growing the industry in a manner that prioritizes investments in local communities.”
“Data centers provide the digital infrastructure that supports our 21st-century economy," Levi said. They “are key players in the ongoing transformation of the electricity sector, and our industry is eager to contribute to solutions.”
Cywinski, with the Sierra Club, argues lawmakers should act now to set ground rules for the industry, such as where data centers can be built and how much the companies should pay for any community impacts.
“We need safeguards, because data center development isn't slowing down,” Cywinski said. “It's getting faster.”
Surging demand could driver higher rates, clash with climate goals
Advocates like Cywinski worry the industry’s growing power needs could undermine Virginia’s climate goals, creating more demand for fossil fuels when the state is trying to transition away from them.
Data centers consume lots of electricity and water in several ways.
First there’s powering the buildings, including thousands of computer servers and electrical equipment that runs all day and night, 24-7, just like the internet.
Then operators have to cool down the systems, which generate huge amounts of heat. Think of your single desktop computer heating up — times a lot.
Data center companies use different cooling methods such as fans, water systems or a mix of both.
EdgeConnex is moving toward a closed-loop water cooling system that would allow it to use less water, Chudgar said. The water runs through a heat exchanger without evaporating, allowing the company to reuse it.
The rise in data centers using electricity 24/7 has already started to drive up the state’s energy demand, officials say.
“Power demand in Virginia is growing at higher levels than any time since World War II,” said Aaron Ruby, spokesperson for Dominion Energy.
The utility expects power demand to double in the next 15 years. Data centers are the largest contributor, though other factors also play a role, including population growth and rising numbers of electric vehicles.
To accommodate exploding demand, Ruby said Dominion has to pursue an “all of the above” approach.
The utility has proposed building several new natural gas plants, despite its requirement to meet the terms of the 2020 Virginia Clean Economy Act, which says that all of the state’s power generation must come from carbon-free sources by 2045.
About 80% of the infrastructure Dominion plans to build will support carbon-free power generation, Ruby said, including solar, nuclear and offshore wind. But, he said, more natural gas is also critical to keep the lights on.
In its most recent long-term plan released last month, the utility told state regulators it will need “significant investment in new generation resources, an expanded and improved transmission and distribution grid, and continued focus on energy efficiency programs” to ensure reliable energy for customers.
As a result, customers can expect their bills to rise by a little over 2.5% each year over the next 15 years, Ruby said.
Ruby said Dominion is allowed to ask the state for permission to keep certain power plants online beyond the date set in the 2020 law if needed, but the utility has another two decades to make that determination.
Data centers also prompting more renewable energy
Meanwhile, many data center companies are trying to source more power from renewable sources to help meet their own climate goals and requirements.
Google, for example, has pledged to achieve net-zero climate emissions by the end of this decade. The company is nowhere near that goal, according to the Associated Press, and cites the demand from artificial intelligence on data centers as the main reason.
Those goals, however, are driving construction of new projects like wind and solar farms across the region.
One example is just south of the Virginia border, in North Carolina’s rural Chowan County. Charlottesville-based Apex Clean Energy is building 45 wind turbines across more than 6,500 acres of farm and timber land.
The project has a single customer: Google. All electricity from the 189-megawatt wind farm will go to the search giant to help power data centers along the East Coast.
Nearby in Elizabeth City, North Carolina’s only other wind farm exclusively sells power to Amazon for data centers.
Amazon also recently signed an agreement with Dominion Energy to help fund the utility’s goal of building a small modular nuclear reactor in Virginia.
EdgeConnex, which operates the Norfolk data center, also hopes to buy more of its energy from clean energy projects, Chudgar said. But they just aren’t being built fast enough.
“What we’re seeing is that the demand for power on the data center side is exceeding the build potential of renewables,” Chudgar said. “It's just a fact right now.”
