Conference panelists debate limits on new datacenters in Virginia

Northern Virginia's datacenter boom is straining the power grid and could threaten the state's ability to meet its decarbonization goals, speakers at a regional conference said, with an environmental activist suggesting the state limit new datacenter construction.

Speaking Oct. 28 at Infocast Inc.'s Southeast Renewable Energy conference in Charlotte, North Carolina, Dominion Energy Inc. Vice President for Regulatory Affairs Scott Gaskill said about 30 square miles in the Loudoun County, Virginia, area is currently constrained both for generation and transmission capacity due to datacenter activity. He said load growth in the area is forecast to rise by about 5% annually over the next 10-15 years, which means total load in the area would double over that period.

Datacenters have become a topic of great concern in Virginia, where an area centered on Loudoun County has seen explosive growth in the industry, earning itself the nickname "Datacenter Alley." In December 2023, the Virginia General Assembly's Joint Legislative Audit and Review Commission issued a resolution calling for a study of datacenters' impacts on Virginia and the appropriateness of the state's policies for the industry. That report is scheduled to be completed in December.

Gaskill said the surging power demand from datacenters poses problems for the state's ability to achieve a net-zero power sector by 2050, as required by the Virginia Clean Economy Act (VCEA) of 2020. If all the new load growth threatens the reliability of the power system, he added, the State Corporation Commission has the authority to delay planned retirements of fossil fuel-fired generation.

Sarp Ozkan, vice president of commercial product for energy analytics firm Enverus, echoed the concerns over the power grid's ability to meet the growing demand with clean energy. "Datacenters need to be online in the next three to six months, whereas getting through the interconnection queue takes seven years," Ozkan said.

That need for power means datacenter operators will not be able to hold out only for clean energy resources, Ozkan added.

"It doesn't matter what kind of generation it is; they're willing to take it at this particular moment because of that mismatch," Ozkan said. "Looking forward, I do believe that they do believe in those clean energy goals, and they want to get there, but in the short term, I think this is causing a lot more volatility in terms of the way" those goals are achieved.

Meeting the law equal to meeting demand

However, environmentalists on the panel criticized that thinking, saying the state should not treat datacenter load growth as inevitable and instead prioritize meeting its VCEA targets over ensuring the industry's continued growth.

"In our view, meeting VCEA goals should be treated with the same seriousness ... as meeting growing demand, understanding, obviously, the utilities' obligation to serve," said Kim Jemaine, managing director at advocacy group Counterspark.

In the future, "we'd love to see an emphasis on how do you get to that growing demand, how do you meet that growing demand with clean energy?" Jemaine said.

Meanwhile, Rachel James, a staff attorney with the Southern Environmental Law Center, went even further, calling for regulators to consider blocking new datacenter construction permits. "In my mind, it makes me think of children," she said. "Children want a lot of things, but they don't always get what they want."

However, Gaskill rejected that argument, saying that if Virginia blocks new datacenters, developers will continue to build them elsewhere, potentially in places with lower environmental protections than Virginia.

"From an environmental perspective, I think it is better that they be built in an area where we do have the Virginia Clean Economy Act even if it means that there will be some additional fossil generation," Gaskill said. Even if new peaker plants are needed for reliability, "that is still far better from an environmental perspective than being located in Ohio or wherever and then meeting that with coal generation," he added.