Data center developers seek on-site energy in Wise

Energy consumption by data centers has become a flash point for opposition groups.

Developers of a data center campus proposed for a site adjacent to the Lonesome Pine Airport in Wise County hope to sidestep that problem by generating power on-site. The project could be powered with a novel energy source: hydrogen.

Late last year, Red Post Energy Group, a Texas company that develops, owns and operates complex energy infrastructure, signed a letter of intent with Wise Innovation Hub Venture, an entity connected to King George County-based data center developer Oasis Digital Properties, to collaborate on a power supply solution to support the proposed campus.

“The first matter of business is to solve the power issue,” says Ross Litkenhous, a partner with Wise Innovation Hub Venture.

Red Post Energy founder and CEO Lance Medlin says the company is studying whether powering the project with hydrogen is feasible.

If so, Medlin says his company would build a $300 million facility near an existing natural gas pipeline to convert natural gas to hydrogen. A new 10-mile pipeline would then transport the hydrogen to a $700 million power station at the data center campus.

If Red Post Energy determines hydrogen is not practical, Plan B would be to power the project with natural gas.

Brian D. Falin, director of economic development for Wise County and executive director of the county’s industrial development authority, says that Wise County has at least 100 natural gas wells and a significant pipeline infrastructure.

The goal is to generate about 600 megawatts.

As of press time, though, Litkenhous was anxious to see whether a General Assembly bill regarding data centers’ tax exemption would include restrictions on power sources. The General Assembly’s special session was slated for April 23.

“We are unsure how restrictive the new legislation in Richmond will be as it relates to gas,” he wrote to Virginia Business.

Once developers determine a feasible power supply, the first data center could open in three years, Litkenhous says. Developers have 300 acres under a purchase-option. He says the project could ultimately include between eight and 10 data center buildings.
One of those buildings can generate

$2 million to $3 million in annual real estate and property taxes for Wise County, according to Falin.

“Nothing is going to do for our budget what data centers can do,” he says.