Virginia Data Centers: Growth Continues
The demand for data centers in the U.S. is exploding. The need to warehouse digital information — a need that AI has now supercharged — is expected to drive a 160 percent surge in new U.S. data center construction by 2030. One state in particular — Virginia — has emerged as a leader in meeting the seemingly endless need for new data storage facilities. According to Virginia Business, 70 percent of all global internet traffic cascades through the state, making it the “world’s undisputed data center capital.”
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That’s not hyperbole. The Commonwealth of Virginia is now home to at least 236 data centers and 61 data providers, putting it far ahead of the other 49 states. The high-tech heavyweights that rely on Virginia-based data centers include AWS, Google, Verizon, and Meta. Leading financial services providers such as Visa, Capital One, and Bank of America depend on the state’s massive data center infrastructure as well.
Yet, despite the millions of megabytes of data stored in Virginia, there is only a relatively small section of land currently devoted to data centers. “While the centers can be found around the state, most are in Northern Virginia,” the Virginia Mercury found. “Eastern Loudoun County, where the facilities cover roughly 573 acres, is known as Data Center Alley.” But that may be changing. The Mercury reports that local officials have recently approved plans to move forward with the construction of at least 40 new facilities in the near term.
From a state coffer perspective, this ongoing build-out is likely welcome news. According to the Data Center Coalition, the data center industry so far has invested more than $37 billion in Virginia in recent years, which has helped increase local employment by 27 percent since 2017 and expanded the state’s GDP by 52 percent during that same time. While data center growth has been a boon for the local economy, the uptick in facilities has triggered alarm bells for environmental groups concerned that the proliferation could further erode local resources — especially already-stressed water supplies.
“Concerns are being raised over the environmental impact of Virginia’s data centers after a report revealed they have increased their water consumption by almost two-thirds in the last five years,” according to one news report which alleges “Virginian data centers used more than 1.85 billion gallons of water in 2023 alone, up from 1.13 gallons in 2019.” The demand for additional water is understandable because data centers rely on water to cool their infrastructure, but water usage is only one environmental concern. Virginia data centers are also “causing an unprecedented spike in projected energy use for the region,” reports The Bay Journal. “As a result, environmental advocates are increasingly concerned about Virginia’s ability to meet renewable energy goals.”
To find common ground, local lawmakers from across party lines have introduced an array of legislation designed to fast-track new data center construction while addressing environmental concerns. “Both Democrats and Republicans have introduced about a dozen bills addressing data center growth, ranging from evaluating the costs of electric grid upgrades; requiring buffers around facilities and site assessments of land, air and water impacts; and linking clean energy sourcing requirements to tax credit eligibility,” according to the Mercury.
Given the steep growth projections for AI and the concurrent demands for additional data centers, Virginia lawmakers are faced with the challenge of continuing to meet those demands while, at the same time, working to preserve the Commonwealth’s natural resources. It’s an unenviable task, but one that will be met if the state hopes to hold on to its crown as the “world’s undisputed data center capital.”
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