Virginia is developing a piecemeal data center moratorium. The potential impacts are complicated.
Despite the Virginia governor's reluctance, a piecemeal data center moratorium is developing across various localities, with some implementing bans and others mulling restrictions. This trend affects Virginia's position as a data center hub and raises complex trade-offs concerning local economic development, water usage, and electricity demands. The shift may lead to increased data center development in other states with more carbon-intensive power grids.
Virginia is witnessing the emergence of a piecemeal data center moratorium, as various localities consider or implement bans on new data center development, despite Governor Abigail Spanberger's disinclination to impose a statewide ban. Front Royal has already prohibited data centers in industrial areas, while Shenandoah County considered a ban, and Frederick County is exploring removing data centers as a permitted use. Spotsylvania and Loudoun counties are also mulling bans, with state Sen. Glen Sturtevant (R-Chesterfield County) formally calling for a statewide moratorium.
This shift in public opinion against data centers is causing development to slow in Virginia and accelerate in "frontier markets" like West Texas, according to real estate firm JLL. Virginia's potential loss of its data center capital status has complicated impacts, including on local economies, water usage, and electricity demands. Data centers consume significant water for cooling, and a Virginia Department of Environmental Quality study warned of limited capacity for new withdrawals in Eastern Virginia, although the report primarily blamed paper mills.
Specific projects like Google's data center in Botetourt County face scrutiny over water usage, though Google has reduced its estimates by planning electric cooling. However, electric cooling increases reliance on Appalachian Power, whose grid is 65% coal-powered, highlighting a trade-off between water conservation and carbon emissions. Rural counties like Pittsylvania County, where Stack Infrastructure has committed to a large project, see data centers as crucial for tax revenue and high-paying jobs, raising questions about economic equity if development is halted. Ultimately, a statewide or local moratorium in Virginia could shift data center demand to states with more carbon-intensive grids, potentially increasing overall environmental pollution and impacting the US supply chain for related manufacturing industries.