- Virginia’s incoming governor will face rising electricity demands and strained power supply due to rapid data center expansion, particularly in Northern Virginia.
- Spanberger campaigned on reducing energy costs for consumers, expanding renewable energy and in-state generation, and ensuring data centers “pay their own way,” while remaining open to extending existing tax breaks for the industry.
- Policy experts emphasize that Spanberger’s administration should involve localities in decisions about energy and data center development to address concerns over costs, emission, and land use while ensuring economic benefits are shared.
It’s probably not too early for Abigail Spanberger, fresh off last week’s 57%–43% election night win, to be thinking about data centers.
The Virginia governor-elect will inherit spiking electricity demands and gaps in the state’s power supply thanks in part to the state’s concentration of the cloud computing infrastructure, which is projected to continue to grow.
There are 663 data centers in Virginia, about a third of them in Loudoun County’s “Data Center Alley.” The county’s former lax building and zoning regulations, tax incentives and proximity to an extensive fiber optic network, plus relatively affordable power across Virginia, have spurred the building boom since the late ‘90s — and a local board of county supervisors projects the number in Loudoun alone will continue to increase.
“We’re going to start butting our heads up against [energy] constraints.”
Bill Shobe, University of Virginia energy economist
“We’re going to start butting our heads up against constraints,” University of Virginia energy economist Bill Shobe told Technical.ly. “We have to figure out how to provide the electricity, how to stay compliant with our clean energy goals and how to keep consumers from having to pay for providing electricity to data centers.”
During Spanberger’s campaign as the Democratic candidate, running against Republican Winsome Earle-Sears, she backed alleviating energy costs for consumers and incentivizing renewable energy projects, but also said she’d consider extending tax breaks for data centers. Spanberger’s campaign did not respond to questions regarding plans for energy policy and data center regulation once she takes office in January.
However, because the Democratic party now has control of both houses in Virginia, Spanberger is in a strong position to get desired legislation passed, per Mark Christie, an energy law and policy expert from William & Mary.
He’s expecting potential rules will get a ton of attention from Dominion Energy — the primary utility in Virginia — and data center industry leaders.
“The interest groups involved,” Christie said, “have a lot of influence in the legislature and have very strong lobbying teams.”
Power demands are expected to keep rising in Virginia
Over the next five years, power consumption by gigawatt is expected to more than double in Loudoun County, in large part because of demand from data centers, which require large amounts of energy for uninterrupted server operation and to keep cooling systems running.
Loudoun County’s current data center power demand is around 5,300 megawatts (a unit of power often used to measure large infrastructure like power plants). Across the globe, data center energy demands are expected to double by 2030, according to an April report by the International Energy Agency.
Loudoun isn’t the only spot in Virginia expected to keep guzzling energy. Its neighbor, Prince William County, has data centers that currently demand up to 1,675 megawatts. But that’s expected to triple to about 5,100 megawatts as under-construction and planned structures start coming online.
Spanberger said on the campaign trail she wants data centers to “pay their own way and their fair share” as electric bills are spiking in Virginia and across the country.
To spur more power capacity, Spanberger has said she intends to increase in-state production, including building solar in abandoned mines and parking lots.
Virginia utilities currently bring in 40% of their supply from elsewhere, the highest rates among all US states.
What could rulemaking look like?
Gov. Glenn Youngkin, the Republican incumbent Spanberger will take over from, has been a fan of data center development, said Christie, who specializes in energy policy and lawmaking at William & Mary. Youngkin has repeatedly touted related investments, like a $9 billion commitment from Google, and has vetoed legislation he says would hinder future data center development and tax revenue.
“Virginia by law has given tax subsidies to data centers for many years,” Christie said, “whether those subsidies should continue given the backlash building against data center development will be one of the most interesting issues in the upcoming legislative session.”
Spanberger during her campaign stated she would consider extending tax breaks for data centers — one of the key reasons the structures are booming in the state, but said she’d need to evaluate how it benefits residents.
Shobe, the energy economist from the University of Virginia, noted Spanberger’s goal to rejoin the Regional Greenhouse Gas Initiative, a cooperative between several states in the Northeast and Mid-Atlantic to cap and reduce carbon emissions. Virginia left the group in 2023 thanks to an executive order from Youngkin.
In participating states, companies purchase allowances for carbon emitted, which can then be invested to pay for infrastructure like renewable energy and flood preparedness.
“In the past, we’ve let our utilities produce emissions that hurt people, but without paying for those that hurt,” Shobe said. “If you’re going to cause damage, you really need to pay for it.”
Because there are talks to build a new natural gas plant in the state, Shobe believes being a part of the Regional Greenhouse Gas Initiative should be a key priority.
Wind, solar, nuclear — and looping in locals
During her campaign, Spanberger called for boosting local energy generation through offshore wind, solar and nuclear projects.
Shobe believes building solar infrastructure specifically should be a focus — 13% of the state’s power supply is from solar generation, and that’s expected to keep rising, per the Virginia Dept. of Energy.
Virginia is on track to complete an offshore wind site by the end of 2026, bucking Trump administration attacks on clean energy projects. It’s projected to be the largest farm in the US. It’ll be difficult to get other wind projects in the works during the Trump administration, Shobe said.
In building data centers and energy infrastructure, Shobe stressed Spanberger should work closely with locals to ensure they have a say.
Some Virginia residents are pushing back against building data centers, largely because of rising electric costs and issues like noise. But Shobe has seen several areas support data center development in their area because of initial construction jobs and the income from property taxes.
“For a lower income locality, they have a data center with $250,000 or a million dollars worth of tax payments every year, it can be a huge deal,” he said.
There should be incentives for installing and building solar infrastructure, like lowering electric costs for localities, he said, and stakeholders shouldn’t be forced to invest in the infrastructure. In Maryland, localities are concerned about recent legislation that limits counties’ ability to establish solar zoning rules.
“To be treating localities like they have to take something they don’t want in order to benefit urban centers,” Shobe said, “is just going to make them mad.”
