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Virginia Mercury: Virginia Explained: Data Center Expansion, With All Its Challenges and Benefits

Posted by Charlie Paullin on May 28, 2024

Virginia Mercury reports on the prevalence of data centers that support artificial intelligence in Virginia quoting United's Kim Jemaine on the importance of grid-enhancing technologies to support the increase in power demand that data centers generate.

Humanity is almost a quarter of the way through the 21st century and Virginia — home to 70% of the world’s data centers — is on the frontlines of the latest emerging technology: artificial intelligence, or AI.

The prevalence of data centers and the rising role of AI don’t equate to a dystopian battle between humans and machine control, though (at least at the moment). Rather, these issues are at the center of a debate over localities’ authority and revenue benefits, historic preservation, environmental considerations, and electricity demand and utility rate projections, all shaped by ever-increasing internet use.

The state is studying data center development

Northern Virginia, the densely populated suburbs and exurbs located just outside the nation’s capital, is home to 70% of the world’s data centers, the huge warehouses that store computers’ processing equipment, internet network servers and data drives. With people increasingly using web-based programs on an average of 22 internet-connected devices in homes, data centers are seen to be needed more than ever.

While data centers are proposed as potential drivers of economic benefits for localities, a number of Virginians have expressed concerns about the proliferation of the warehouses in the state and their effect on communities where they’re located.

Local, historic concerns

In Orange County, Wilderness Crossing data center received national attention for its proposed development near a Civil War-era battlefield, fueled by concerns after data centers were built near other historic sites in Loudoun and Prince William counties in addition to other parts of the state.

The proposed Wilderness Crossing site near  Wilderness Battlefield sprawls across 2,600 acres, 732 of which  would accommodate data centers — which can typically have a footprint of over 100,000 square feet each and reach 90 feet tall —  and distribution warehouses. The site plan also envisions over 5,000 residential units and 200,000 square feet of mixed commercial use buildings, and a realigning of Route 20.

The development would also obstruct the views of Virginia’s hillside, take up forested land, sit on abandoned gold mines and draw on water from the Rapidan River, which experienced drought-like conditions last year. Concerns about data centers’ impact on local waterways have been echoed around the state.

The area’s water is served by the Rapidan Service Authority. According to its recently approved water permit, obtained by the Virginia Mercury, the Department of Environmental Quality rejected an initial request finalized after the Wilderness Crossing rezoning that sought to pull more water for projected demand increase.

Other data center proposals appear to show that the developments would encroach on historic sites statewide, such as Manassas National Battlefield Park, Culpeper National Cemetery, Brandy Station, Sweet Run State Park and Savage Station Battlefield.

Two historic Black graveyards belonging to the Gaskins family in the Brentsville area of Prince William County are alleged to have been damaged from the construction of a data center and a nearby power substation.

The pressure to these sites has already been largely seen in Loudoun and Prince William counties, which have been dubbed Data Center Alley, and recently approved a Digital Gateway rezoning in their respective jurisdictions. 

Data center developments have been continually proposed throughout Virginia and are welcomed by some communities. A 1,200-acre data center site was recently approved in Hanover County. The Delta Lab, an energy innovation initiative focused on Southwest Virginia, has studied locating one in that region that could use water from mines for cooling.

$1 billion investment

Just days before the concern over Wilderness Crossing became public, Gov. Glenn Youngkin announced that Google, one of the biggest companies in the world, would expand its data center campuses from two facilities to three.

Google completed the first phase of construction on the first two data centers in 2019 with a $1.2 billion investment in the state.

The third center’s creation will usher in an AI Opportunity Fund seeded with $75 million from the company’s philanthropic arm, The fund will help people around the county earn online training certifications. The program joins a separate Grow with Google program, already underway, that teamed with Northern Virginia Community College to offer a new free cyber security career certificate.

Data centers in Virginia have provided $2.2 billion in wages for citizens, and 25% of revenue to Loudoun County have gone into “essential services” like schools, social services and other public programs, Youngkin added.

Impact on power demand

Increased internet usage, including AI, requires data centers to use more electricity. Computing for AI is measured by an entirely new computing graphic processing unit, or GPU.

The utility has connected 94 data centers to date and expects to connect another 15 this year, Blue also told investors. Power Engineering reported on a Securities Exchange Commision annual filing that in 2023 and 2022, 24% and 21% of electricity sales from Dominion were to data centers, respectively.

While the data center computers have become more efficient through a power usage effectiveness score — a rate that determines how efficiently energy is processed for the web-based service to reach internet users — a study from McKinsey & Company found that data center power demand is expected to more than double across the country from from 17 GW to 35 GW. Some of that power could come from Dominion’s 176-turbine  offshore wind project,  expected to generate 2.6 GW of electricity, or enough to power 660,000 homes.

Dominion projects its load growth, which includes data centers and vehicle electrification, to increase from 17 gigawatts in 2023 to 33 gigawatt in 2048, though environmental groups are skeptical of growth proposals being modeled accurately. 

Northern Virginia Electric Cooperative expects to increase its peak electric load by more than 12% per year over the next 15 years, “driven almost exclusively by data centers.”

To meet the demand for data centers, Dominion has included renewable energy technology in its long-term, non-binding integrated resource plan, but is also proposing a natural gas plant, which environmental groups continue to oppose, including protests at a Richmond outdoor festival the utility sponsored. 

Teresa Hall, a spokeswoman for Appalachian Power Company, Virginia’s second largest utility that serves Southwest Virginia, noted that “annual power generation over the last 20 years has stayed relatively flat until now.” The uptick, she said, is thanks to data centers.

“With data centers/increased internet use and AI, the landscape is changing quickly,” Hall said, adding that data centers present a unique challenge because they “require a lot of power – commonly 300 MW or more, which is enough to power all of the homes in a medium-size city.”

Virginia’s leaders have increasingly expressed the need for new technologies such as small modular reactors, tinier versions of traditional nuclear plants that could power a small city like Roanoke with a population of 100,000. Proponents say SMRs could provide baseload, around-the-clock power when renewable technology can’t produce it. The SMRs are intended to provide between 300 to 500 megawatts of power, but none have been turned on in the United States since NuScale pulled the plug on its effort to build one in Idaho due to cost concerns.

Another part of the dialogue focuses on technologies like battery storage and a recently announced 1920 rule from the Federal Energy Regulatory Commission, or FERC, to increase planning for transmission lines across state lines. FERC’s new guidance includes transmission lines that may need to be upgraded from a traditional 110 kilovolt to up to 500 kilovolt capacity, in order to supply data centers.

The regional rule will also help areas pull on generation sources that may be located in other areas of the PJM Interconnection regional grid that Virginia is a member of.

In 2023, Virginia’s legislature passed a bill to truncate a State Corporation Commission review of a transmission line proposal from PJM Interconnection. The line is needed to deliver power for data center development in Virginia and the $670 million project cost is recovered from ratepayers in Virginia.

There’s also an opportunity to strengthen existing transmission lines through grid enhancing technologies, or GETs, and separate ways to utilize a demand side management and energy efficiency programs to reduce the amount of strain on the grid. It can also help get around the 26 gigawatts of electricity stuck in a queue awaiting approval from PJM, 23% of which is from Virginia, said Kim Jemaine, director at Advanced Energy United.

“In the states where they have been adopted at a medium level, GETs have unlocked 30% additional capacity from existing infrastructure and have allowed twice as many new energy projects to be integrated,” said Kim Jemaine, director at Advanced Energy United. Jermaine said GETs “can be installed with little to no downtime and at a fraction of the cost of new infrastructure.

Utilities have said they can’t rely on energy efficiency efforts, like homeowners using smart thermostats to control consumption, because the end use may not keep up with those behaviors. But that dismissal is a “red herring,” Shepherd said. Measuring the load reductions delivered through energy efficiency programs and making actionable plans based on those measurements is not impossible, Shepherd added. 

“I think folks need to chill out and recognize the regular nature of grid planning. It’s just a matter of rolling up our sleeves a little further to make sure it’s done correctly.”

Perhaps ironically, as manufacturing and society in general electrifies more, AI might be able to help with those demand side management programs, as noted by the U.S. Department of Energy. 

“AI has the potential to significantly improve all these areas of grid management,” the report stated, and can be a tool that models for capacity and transmission studies, compliance and review for federal permitting, forecasting renewable energy production and creating applications to enhance resilience. 

Levi, with the Data Center Coalition, said the “industry is committed to leaning in as an engaged partner at this pivotal time. Collectively, we can meet the moment and ensure a clean, reliable, affordable, and resilient electric system that supports the digitization of our economy, widespread vehicle and building electrification, the onshoring of advanced manufacturing, growth in controlled environment agriculture, and other 21st-century economic drivers.”

Local Revenue

But the money.

The local revenue generated by data centers supports Loudoun and Prince William counties — the latter of which could add $54 million in revenue, with $19 million going toward schools and $21 million offsetting a real estate tax increase — as a result of increasing its data center tax from $2.15 to $3.70 per $100 assessed value. 

The data center companies have climate improving commitments, but local permitting pushback to renewable energy sources, including solar, present challenges. 

The centers should “ be required to be 100% renewable before they turn the lights on if they’re serious about their publicly stated comments,” said Hart, with the National Park Conservation Service.

The data center industry’s benefits to Virginia’s economy include the creation of 12,140 direct jobs, including engineers, building control specialists, security, server technicians, logistics professionals, construction management, health and safety specialists, and food services. The future benefits — and challenges — of data center development in the state remain to be seen. 

Read the full article here.

Topics: State Policy, Virginia, United In The News, Kim Jemaine