"Virginia Has the Biggest Data Center Market in the World. Can It Also Decarbonize Its Grid?"
Dominion is a very interesting "lead-dog" utility. Lots of lessons for the rest of the industry.
From Inside Climate News, May 24:
Dominion Energy, the state’s largest utility, says new natural gas plants will be needed to meet rising electricity demand, while the state studies how this booming sector will impact Virginia’s transition to renewable energy.
While short-lived, the denial came as a surprise.
This March, Loudoun County, a suburb of Washington, D.C. in Northern
Virginia that is home to the greatest concentration of data centers in
the world, made an unexpected move: It rejected a proposal to let a
company build a bigger data center than existing zoning automatically
allowed.
“At some point we have to say stop,” said Loudoun Supervisor Michael Turner during the meeting, as reported by news site LoudounNow. “We do not have enough power to power the data centers we have.”
County supervisors would later reverse the decision,
approving a smaller version of the project. But the initial denial sent
ripples throughout Virginia, where concern over the rapid growth of
data centers and what that means for the state’s ambitious
decarbonization goals is growing.
County supervisors would later reverse the decision,
approving a smaller version of the project. But the initial denial sent
ripples throughout Virginia, where concern over the rapid growth of
data centers and what that means for the state’s ambitious
decarbonization goals is growing.
“It is really a salient issue for climate right now,” said Tim
Cywinski, a spokesperson for the Virginia chapter of the Sierra Club,
which has been vocal about its desire to slow down data center
development in the state. “The data center industry is about 2 percent
of global carbon emissions,” he said, adding “In about two years, I
think it will surpass the airline industry.”
Dominion Energy, Virginia’s largest electric utility, has forecast
that data centers will be the most significant driver of rising energy
demand in the state over the next 15 years. And while the utility has
pledged it will decarbonize its Virginia grid by 2045, in line with the
Virginia Clean Economy Act passed by the state legislature in 2020, it
has also indicated in its most recent long-range plan for utility
regulators that new natural gas plants will be needed to meet demand.
“In about two years, I think it will surpass the airline industry.”
“We are 100 percent committed to achieving the goals of the VCEA. We
are not taking our foot off the accelerator with renewables,” said Aaron
Ruby, a spokesperson for Dominion. But, he added, “the clean energy
transition is more challenging than it was a few years ago. The
inescapable reality is we are experiencing unprecedented growth in
electric demand.”
While some environmentalists say the skyrocketing data center growth
threatens Virginia’s ability to go zero-carbon, others say it can be
done — but it will require new ways of managing the grid.
“To me it’s not a question of data centers or clean energy,” said
Nate Benforado, an attorney with the Southern Environmental Law Center.
“I think there is a path forward if we make some improvements.”
Data centers
and Virginia have been hand in glove for almost three decades, since
companies like MAE-East, Equinix and AOL built some of the earliest
modern facilities in the Washington suburbs. With close proximity to the
federal government and the defense firms ringing it, Northern Virginia —
and especially Ashburn in Loudoun County, known as “Data Center Alley” —
quickly became the beating heart of the U.S. data center industry.
“There are data centers located in other areas of Virginia, but
roughly 80% of the industry is located in Loudoun County,” Dominion
wrote in a recent long-term plan submitted to state regulators. “To put
this in perspective, the aggregate of the next six largest data center
markets in the U.S. is not as big as Loudoun County’s market.”
“It is really a salient issue for climate right now,” said Tim
Cywinski, a spokesperson for the Virginia chapter of the Sierra Club,
which has been vocal about its desire to slow down data center
development in the state. “The data center industry is about 2 percent
of global carbon emissions. … In about two years, I think it will
surpass the airline industry.”
Dominion Energy, Virginia’s largest electric utility, has forecast
that data centers will be the most significant driver of rising energy
demand in the state over the next 15 years. And while the utility has
pledged it will decarbonize its Virginia grid by 2045, in line with the
Virginia Clean Economy Act passed by the state legislature in 2020, it
has also indicated in its most recent long-range plan for utility
regulators that new natural gas plants will be needed to meet demand.
“We are 100 percent committed to achieving the goals of the VCEA. We
are not taking our foot off the accelerator with renewables,” said Aaron
Ruby, a spokesperson for Dominion. But, he added, “the clean energy
transition is more challenging than it was a few years ago. The
inescapable reality is we are experiencing unprecedented growth in
electric demand.”
While some environmentalists say the skyrocketing data center growth
threatens Virginia’s ability to go zero-carbon, others say it can be
done—but it will require new ways of managing the grid.
“To me it’s not a question of data centers or clean energy,” said
Nate Benforado, an attorney with the Southern Environmental Law Center.
“I think there is a path forward if we make some improvements.”
‘They Just Continue to Come’ Data centers and Virginia have been hand in glove for almost three decades, since companies like MAE-East, Equinix and AOL built some of the earliest modern facilities in the Washington suburbs. With close proximity to the federal government and the defense firms ringing it, Northern Virginia—and especially Ashburn in Loudoun County, known as “Data Center Alley”—quickly became the beating heart of the U.S. data center industry.
“There are data centers located in other areas of Virginia, but
roughly 80% of the industry is located in Loudoun County,” Dominion
wrote in a recent long-term plan submitted to state regulators. “To put
this in perspective, the aggregate of the next six largest data center
markets in the U.S. is not as big as Loudoun County’s market.”
Lawmakers have embraced the business. Beginning in 2010, Virginia exempted data centers from sales and use tax for many of the key components of their business
as long as they met certain criteria: They had to invest at least $150
million in their facility, create 50 new jobs in the locality where it
was sited and pay at least 150 percent of the prevailing annual average
wage. The exemption remains Virginia’s largest economic development
incentive.
The gambit worked. A 2019 report
by Virginia’s legislative watchdog, the Joint Legislative Audit and
Review Commission, found the exemption “has a sizable influence” in
attracting data centers to the state. It also has a “moderate economic
benefit” for the state, generating about $27 million in Virginia gross
domestic product for every $1 million in foregone tax revenue, JLARC
concluded....
