More data centers equal more electricity demand

Virginia, the world's data center capital, is facing an unprecedented surge in electricity demand, far exceeding its initial projections of 1% to now 5-6% annually. This rapid growth, driven by nearly 650 data centers, particularly in Northern Virginia, is setting new power consumption records and straining Dominion Energy's ability to supply energy. The General Assembly's Joint Legislative Audit and Review Commission (JLARC) projects that average monthly electricity demand will double within a decade. While data centers contribute significantly to Virginia's economy through jobs and tax revenue, they also raise concerns among residents about power and water consumption, noise, and environmental impacts. Policy discussions are focused on meeting this demand, ensuring data centers pay their share of infrastructure costs, and reconciling growth with the Virginia Clean Economy Act (VCEA) of 2020, which aims to phase out fossil fuels by 2050. Recent developments include a pledge from major tech companies like Google, Microsoft, and OpenAI to fund grid improvements for AI data centers, following a meeting with President Donald Trump. An emergency auction proposed by the Trump administration and several governors, including Virginia's Glenn Youngkin, through PJM Interconnection, aims to finance up to $15 billion in new power plants. Dominion Energy's Integrated Resource Plan projects adding 33 gigawatts over 20 years, focusing on a diverse mix including renewables, next-generation nuclear, and natural gas. The utility secured approval for the Chesterfield Energy Reliability Center (CERC), a natural gas plant, under a VCEA reliability exception, despite environmental opposition. Legislatively, Sen. L. Louise Lucas introduced a bill to shift total infrastructure costs to large-load customers like data centers, potentially increasing their rates by 16% while reducing residential costs. Meanwhile, Dominion successfully sued the Bureau of Ocean Energy Management (BOEM) to continue its Coastal Virginia Offshore Wind project despite a federal pause. Experts like McKenna Beck of the Natural Resources Defense Council and Damian Pitt of VCU's Institute for Sustainable Energy and Environment advocate for accelerating clean energy connections over new natural gas plants, while former state official Glenn Davis believes amending the VCEA to be more natural gas-friendly is necessary for economic growth.