Contact: Tim Cywinski, Communications Director, Virginia Sierra Club, (540) 272-5358, tim.cywinski@sierraclub.org
Background
Whether it’s at the expense of our health or economic security, Virginia’s families can not afford unchecked data center expansion. As the data center capital of the world, Virginia is seeing relentless growth, with over 300 data centers in operation or proposed across the commonwealth. This explosive growth leads to degraded air and water quality, skyrocketing electric bills, massive land loss, and setbacks in the state’s climate progress.
The energy demands of data centers could trigger an energy cost crisis. Currently, these centers consume nearly a quarter of the power provided by Dominion Energy, Virginia’s largest utility. As power from data center usage is projected to double in size, Dominion’s Integrated Resource Plan suggests building several new, expensive, and polluting natural gas plants to meet the demand. The construction costs of these plants will be passed on to customers, leading to soaring increases in monthly electric bills. This will increase the energy burden on families, with 29% of Virginians in 2023 already reporting that they had to forgo basic necessities to pay for their energy bills. In addition to impacts on energy bills, the new fossil fuel plants will increase climate pollution, cause adverse health outcomes for communities, and hinder Virginia’s progress on meeting its legal mandate to transition to 100 percent clean energy by mid century.
Despite the uncertainty and risks associated with data center expansion, leaders have yet to pass any substantive protective policies at the local, state, or federal levels. Instead, state legislators authorized the Joint Legislative Audit and Review Commission (JLARC) to study the impacts of data center growth. A key point of the rally is that Virginia’s families deserve to understand how data centers will affect their lives and economic security. To prevent adverse impacts, localities should pause data center approvals until the JLARC study is released and lawmakers have implemented necessary protections.
FACT SHEET
- Dominion Energy – Virginia’s largest electricity provider –reports that data centers are the only growing energy demand sector, with a projected doubling by 2040.
- Dominion states that Data center growth will require an additional 8 gigawatts of power by 2028, over four times the 1.7 gigawatts produced by the North Anna nuclear facility.
- According to data collected from Loudoun Water, potable water usage for data centers has increased by 250% in the last four years with the heaviest use in July-October.
- In addition to the over 40,000,000 square feet of data center space currently built in Virginia, there’s over a hundred development projects for an additional 180,000,000 square feet in the pipeline. For comparison that is equivalent to 1,000 Walmart Super Centers of space!
- At least 14 of the proposed data centers in Virginia are considered “gigawatt campuses” – facilities that will require more than a gigawatt of power. 1 Gigawatt is the equivalent amount to provide energy to 750,000 average homes.
- Only a handful of data center applications have been denied by localities despite overwhelming community opposition.
FAQs
Q: Why does data center expansion lead to higher monthly electric bills?
A: State law permits monopoly utilities like Dominion Energy to pass the costs of new power plant projects on to customers. Dominion Energy has proposed plans to build a new fleet of expensive fossil fuel plants in order to accommodate power to data centers. This growth in energy demand is exclusively attributed to data centers, and the cost of every new plant will fall onto Dominion’s customers. These costs, including new transmission lines and substations, will increase ratepayers' bills instead of being covered by the data center industry responsible for the demand.
Q: What role does Artificial Intelligence (AI) play in Virginia’s data center burden?
A: AI data centers differ from traditional cloud storage centers by way of the energy they consume. The energy required to power an AI data center can be 3-7 times as much as a traditional facility. While power demand from a cloud storage data center ebbs and flows as data is active vs inactive, AI requires an uninterrupted demand of 100 percent. This increase in power in an already energy intensive industry fuels the need to create new energy infrastructure like power plants that are both expensive for ratepayers and unstainable for Virginia’s energy grid. AI is the main driver behind gigawatt data center campuses – facilities that use more energy to power more than 750,000 homes.
Q: Data centers are approved on the local level. Should they be considered a local issue?
A: The negative impacts of data centers will be felt far beyond a local level. It’s not a local issue because electric bill increases are not a local issue. It’s not a local issue because the pollution from fossil fuel plant’s powering the data centers will not impact one community, but they will reverse progress on combating the climate crisis. Every new data center presents dangers for both the economic security of families as well as degradation of the environment.
Q: Data centers are ratepayers too. Doesn’t that mean the data center industry helps subsidize the cost for new energy infrastructure as well.
A: Families are not given the luxury of negotiating electricity pricing directly with utilities like the data center industry can. While Data centers do pay for electricity, they enjoy a fraction of the costs then that of residential ratepayers. The pricing model of Dominion Energy is backwards – the more energy used, the lower the price of energy usage. Combine this factor with the subsidies funded by Virginia’s taxpayers provided to the industry, and it is clear that data centers aren’t paying their fair share of the costs of new energy infrastructure.
Q: What are some solutions to the data center issue.
A: As home to the largest data center concentration in the world, Virginia is uniquely positioned to set the standard for responsible data center growth that doesn’t result in drastic impacts on electric bills and irreversible damage to climate. It's vital for decision-makers at every level, from local to federal, to mandate clean energy usage and operational energy efficiency for data centers, while also ensuring the industry bears its fair share of the energy infrastructure costs it generates.