Although some Virginia counties are backing away from hosting more data centers, Powhatan County supervisors voted 3-2 in October to approve an estimated $2.7 billion data center campus.
The project will be on 119.9 acres partly bordering Chesterfield County, and supervisors OKed rezoning and a conditional use permit, rejecting the Powhatan Planning Commission’s recommendation.
The developer, Newport Beach, California-based Province Group, estimates that its capital investment at full buildout would be $3 billion, but county staff estimates the full investment would be $2.7 billion, based on Richmond region square footage values. The project buildout is expected to take five years at minimum.
The data center campus as proposed has three detached data centers with a combined 1.525 million in floor area square footage, as well as six supporting structures. About 20% of the property — roughly 24 acres — will be designated open space.
The conditional use permit will allow the developer to build structures up to 75 feet high, rather than being capped at a height of 45 feet.
A Mangum Economics study projects the development will create 165 direct jobs. According to the study, the property’s data centers would directly pay $17 million in county taxes by 2034, and the county’s total annual tax revenue, including indirect taxes from activity the data centers support, would be $21.5 million.
Several Powhatan residents said they were concerned that the project had no end user and has a provision for numerous possible other uses after 18 months.
To secure an end user, “we need to go to market,” Province Group CEO Mark Kerslake told the board of supervisors. “In order to go to market, we need our zoning approval. The users … have many sites being thrown at them. They won’t engage unless we have zoning approval.”
In response, Powhatan Supervisor Mark Kinney said the $17 million tax revenue projection depends on the project being fully built out.
“The $17 million is projected, and that’s if all three buildings are built out, they get a user that wants all three [and] all three buildings are packed to capacity with servers. Well, you know what comes after ‘if’ — ‘but,’” said Kinney, who voted against the permit.
The approved Powhatan data centers would use an anticipated 300 megawatts of electricity at full capacity. Dominion Energy will supply electricity to the facility, which will require building a substation.
The developer planning a natural gas power plant and data center campus on 2,233 acres in the Banister and Callands-Gretna districts of Pittsylvania County withdrew its rezoning application Monday, after facing vocal opposition from residents at public meetings held last week.
Instead, Herndon-based Balico, the development company behind the project, intends to file a rezoning application with Pittsylvania County by Nov. 19 pitching a scaled-down version on about 600 acres in the same area, according to Balico founder and CEO Irfan Ali.
Ali acknowledged the project has a “certain amount of a perception issue,” but insisted the controversies generated after the project’s first application wasn’t the main reason for Balico’s initial withdrawal.
“The reason we scaled it down is because, really, what my engineers and lawyers concluded is that we don’t want to trigger a traffic impact analysis study with [the Virginia Department of Transportation],” Ali said Wednesday, “so we’re staying under the threshold in this filing.”
However, Ali hopes the project will eventually be able to grow beyond 600 acres. “This is the first phase, and ultimately we will continue,” he says.
The initial application for the project would have included up to 84 data center buildings and a 3,500-megawatt natural gas power plant in a rural area along Chalk Level Road. That development would have created 700 jobs and deliver a minimum of $120 million per year in tax revenue to Pittsylvania County once it was built out, Ali had said.
At last week’s public meetings, attendees sternly expressed concerns about the project, including worries about dropping property values, traffic and the impact on the area’s rural nature.
Last week, Robert Tucker, vice chair of the Pittsylvania County Board of Supervisors, announced Balico didn’t have the votes to get the rezoning passed by the supervisors. When reached Friday, Tucker said he wouldn’t support a smaller proposal from Balico either.
“Based on everything that we’ve experienced with this particular investor and the community reaction, I don’t think that I’m going to support that,” he said. “I can’t speak for the other supervisors, but I don’t think the support is there.”
A scaled-down project would create between 300 and 400 jobs, according to Ali, who noted he’s heard of Pittsylvania residents traveling two hours to go to work. “This will create jobs right in their own backyard,” he said.
Balico has hired LINK Public Affairs, a Richmond communications firm, to rally local support for the project. “We’re building already quite a strong momentum among the business community,” said Ali.
Data centers require water for cooling servers. Initially, Ali hopes to tap into a source of nonpotable water in Chatham. Long term, Ali said, he’s talking with officials in Hurt about building a pipeline to carry water about 19 miles from a town water source to the data center campus. Town Mayor Gary Hodnett did not immediately respond to a request for comment Thursday.
The pipeline, Ali said, would be able to deliver up to 18 million gallons of water a day. The data center campus will only require 2 million gallons a day, he noted, so the remaining water could be used by homes in that area that rely on individual wells.
Building the pipeline and a water treatment facility would cost about $17 million, Ali estimated. Before work begins on that, however, Ali said he will need to identify a user for the data center campus. “None of this can be financed if we don’t have a user at the back end,” he said.
Matt Rowe, director of economic development for Pittsylvania , receives multiple calls a week from data center developers looking at the county.
Rowe pointed out that the region isn’t subject to “hurricane impacts” and has low seismic activity. The soil in Pittsylvania is good for load-bearing capacity, he added.
“When you get closer along the coast there and certain places, [where] you’re dealing with more sand, and that just adds cost to construction,” Rowe said.
Location also works in favor of Pittsylvania, he noted.
“Almost all internet traffic is going through Ashburn, Virginia, or Marietta, Georgia, or the QTS facility in Sandston,” Rowe said.
Pittsylvania officials will need to consider what role they want data centers to play in the region’s economic future, Rowe maintained. The county’s comprehensive plan was adopted in 2010.
“What’s even more important to the county and for long term is looking at probably doing a total rewrite of its comprehensive plan because that’s really what guides … future growth.” Rowe said.
For decades, the promise of economic revitalization has tantalized Southwest Virginia. The sparsely populated region, once home to booming coal mining and tobacco industries, has had money and resources thrown at it by local, state and federal governments, but it’s still had a difficult time finding its footing.
As the region’s economy has declined, so too has its population, with the University of Virginia’s Weldon Cooper Center for Public Service predicting Southwest Virginia’s headcount will have dropped by more than 10% between 2020 and 2030 and will decline more than 23% by 2050. What’s more, just over half of Southwest Virginians participate in the labor force — about 12% lower than the state average, according to the Virginia Employment Commission. That’s due to a variety of factors, including child care, transportation, housing and the opioids epidemic.
And that’s in normal times — not taking into account the impact from disasters such as Hurricane Helene, which damaged or destroyed more than 500 homes and 80 businesses across the region in September and shut down a l.5-mile segment of U.S. Route 58, a key regional artery for commerce and travel that stretches from far Southwest Virginia to Hampton Roads. The Virginia Cooperative Extension has estimated that agricultural damage in the region could surpass $125 million.
Despite Southwest Virginia’s challenges, billions of public dollars have been invested regionally during the past several years, including $3.8 billion in planned Interstate 81 improvements, $8.2 million in affordable housing support, and $1.48 billion in federal funds to expand broadband access. And that’s not to mention Highlands Community Services’ new mental health crisis center, which opened in Abingdon in May, or Emory & Henry University’s new state lab school, SWVA HEALS (Southwest Virginia Healthcare Excellence Academy Lab School), which launched in August and prepares regional high school students for careers in health care.
Plus, considering the region’s historic connection to the energy industry and its ample supply of vacant land, economic development officials have been marketing Southwest’s abandoned coal mining lands for renewable energy and data center projects. While industries like those could provide investments in jobs and capital the region needs, the situation won’t change overnight, experts caution.
“We hear all the time, ‘Oh, you guys have all this land. You can do solar everywhere. You can do projects everywhere,’” says Will Payne, director of InvestSWVA and managing partner of regional economic development consulting firm Coalfield Strategies. “And … if that was true, where are the projects right now?”
Payne is heavily plugged into Southwest Virginia politics and his work is focused on marketing the region for economic development projects.
Fighting against time
Completely revitalizing a region’s economy takes time. Energy projects are complex and can take years to get off the ground, considering the due diligence involved.
“There are no quick wins in energy generation projects,” Payne says. “There are no quick wins in data center projects.”
Even developing a solar farm can take four years to complete, and that’s “probably really aggressive,” says Will Clear, managing partner of Bristol-based consultancy Virginia Energy Strategies and a former chief deputy director of the Virginia Department of Energy.
Clear and Payne are advisers for Energy DELTA Lab, a regional nonprofit collaborative initiative to market more than 65,000 acres of previously mined land in the region to develop into renewable energy projects, such as solar, wind or hydrogen, and data centers. Partners in the initiative include energy companies, InvestSWVA, the Southwest Virginia Energy Research and Development Authority, and the Virginia Department of Energy.
“The idea of using mine lands — it makes a lot of sense … using brownfield sites, but the real issue is not that simple,” Clear says. “There’s a lot of complexities associated with land that has been previously mined and currently mined [and] potentially under permit. There’s a lot of things you have to tackle.”
In November 2023, Gov. Glenn Youngkin announced an agreement between Wise County, the Energy DELTA Lab and Dallas-based Fortune 100 energy company Energy Transfer to aid in developing a variety of energy projects that would attract private investment and fit Youngkin’s all-of-the-above strategy for fulfilling the Virginia Clean Economy Act’s renewable power mandates.
Youngkin also announced a new initiative this year, Accelerate Southwest. Aimed at improving the region’s economic development, infrastructure, housing and cost of living, the initiative focuses on existing programs like improvements to I-81 and the DELTA Lab.
On the economic development front, although it requires a great deal of time and investment to bring data centers and renewable energy projects to fruition, next year could be a turning point for such developments in the region, Clear and Payne say.
“I think that in 2025, it’d be fair to say that we’re going to see real movement here based on a lot of due diligence that’s been going on for the last three years,” Payne says.
Data center storage rack manufacturer Tate is investing $15 million in a new manufacturing facility in St. Paul, with plans to add 170 jobs over four years, says Virginia Coalfield Economic Development Authority’s Jonathan Belcher. Photo by Tim Cox
From mining to manufacturing
Energy and data center projects are eyed as key remedies for the economically ailing region, which has seen its coal production fall off dramatically during the past three decades. The region’s coal production, which occurs mostly in Buchanan, Dickenson and Wise counties, fell from 46.6 million tons in 1990 to fewer than 10 million tons in 2020, according to the Virginia Department of Energy.
“Coal’s not dying. We’re producing more coal than we’ve ever produced. It’s just with fewer people,” Sen. Travis Hackworth, R-Tazewell County, said during the Southwest Virginia Economic Forum at the University of Virginia’s College at Wise in May.
“If you look back at that 20-year period, there were definitely highs and lows for that industry, [but] it’s continued to be a significant part of the economy,” says Randall Rose, associate vice chancellor for community and economic development at U.Va. Wise. “However, there also has been a very strategic effort looking at diversifying the region so that if there is a decline in the coal industry, it doesn’t make such a major impact on the economy and the lives of individuals.”
At U.Va. Wise, Rose is responsible for fostering the symbiotic relationship between the university’s pool of student talent and the region’s employers, as well as assisting in larger economic development and entrepreneurship-focused goals for the region.
U.Va. Wise is also part of Opportunity Southwest, a regional collaborative initiative for promoting entrepreneurship. It was formed in 2012 to create the Blueprint for Entrepreneurial Growth & Economic Prosperity in Southwest Virginia, a strategic planning document for developing a regional entrepreneurial ecosystem.
“That blueprint really set the stage for not only local economic developers and small business developers, but also regional and statewide and even federal partners to see what that future could look like and where the areas of focus would be for the Southwest region,” Rose explains.
Additionally, U.Va. Wise has been working with localities and economic development officials to research the feasibility of renewable energy and data center projects at specific sites in the region.
“We want to support in any way possible the economic developers in the region [and] the private sector,” Rose says.
Another focus of economic development efforts in Southwest Virginia has been manufacturing.
“A lot of that goes back to the blue-collar heritage of the region with the coal mining history. That workforce adapts very well to manufacturing positions, so we focus very heavily on that,” says Jonathan S. Belcher, executive director and general counsel for the Virginia Coalfield Economic Development Authority (VCEDA). Established by the General Assembly in 1988 to enhance and diversify Southwest Virginia’s economy, VCEDA works closely with the Virginia Economic Development Partnership and local economic development officials to secure new projects for the region.
Most of the manufacturing companies VCEDA seeks to recruit are advanced manufacturers using specialized equipment that requires specific training and experience. “They’re not just basic assembly positions or something that would be a lower skill level or lower-paying position,” Belcher says.
One such project was announced in November 2023, when data center storage rack manufacturer Tate announced it would establish a new 270,000-square-foot manufacturing facility in St. Paul, along the Russell and Wise counties border. The nearly $15 million project is expected to create 170 full-time jobs over the next four years, Belcher says.
The region’s manufacturing industry has started paying off — literally. Since early 2022, average annual wages in Southwest Virginia have been growing at a higher rate than the rest of the commonwealth, according to data from Chmura Economics & Analytics.
Growing tourism, small business
While Southwest Virginia continues to struggle with challenges such as its low workforce participation rate and obstacles to economic development, the region still attracts tourists to its large swaths of unspoiled, natural beauty. For that reason, tourism has continued to grow in Southwest Virginia during the past couple of decades, Belcher says. Much of the tourism in the region is centered on outdoor recreation such as hiking, ATVs and horseback riding — but it’s also home to The Crooked Road Heritage Music Trail. The scenic, 330-mile driving route connects a variety of music venues and festivals including the Birthplace of Country Music Museum in Bristol and the Floyd Country Store, which features live Appalachian music and a weekly Friday Night Jamboree.
“There’s also a lot of historical attractions in the area going back to the Colonial time period,” Belcher says. And much of Southwest’s tourism development has been “building upon those assets … building small businesses that support that.” As a result, more colleges in the area have also started to implement hospitality management and outdoor recreation management programs.
Some of these small businesses and economic stimulation comes from Airbnbs, campgrounds, restaurants and food trucks, he says. Many restaurants, coffee shops and other small retailers have emerged from seed capital programming and regional Small Business Development Centers. One such small business that’s found success is a drone photography business run by Dickenson County native Brad Deel. He received a $10,000 grant from VCEDA, and now his photography is used to market the region and promote tourism.
“We really feel like small business development is a key part of the economic development strategy as well,” Belcher says. “Relying just on larger industrial recruitment projects is a really misplaced strategy to rely solely on. The activity [we’re seeing is] really helping with the stability of the economy.”
Southwest Virginia at a glance
Known for its rural, mountainous landscapes and as the birthplace of American country and bluegrass music, Southwest Virginia includes Bland, Buchanan, Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington and Wythe counties, as well as the cities of Bristol, Galax and Norton. Formerly known mostly for coal mining, the region is turning its efforts toward attracting ecotourism, alternative energy projects and data centers. The University ofVirginia’s College at Wise, Emory & Henry University and Mountain Empire, Wytheville and Southwest Virginia community colleges are also located in the region.
Population
335,847
Top employers
Walmart
CGI
Lee, Russell, Scott, Tazewell and Wise county school systems
Tempur-Sealy
Coronado Coal
Notable hotels
The Bristol Hotel (Bristol) 65 rooms, 3,800 square feet of event space
The Inn at Wise (Wise) 49 rooms, 5,000 square feet of event space
The Martha Washington Inn
& Spa (Abingdon) 63 rooms, 3,200 square feet of event space
The Primland Resort (Meadows of Dan) 53 rooms, 12,149 square feet of event space
The Sessions Hotel (Bristol) 70 rooms, 2,311 square feet of event space
Western Front Hotel (St. Paul) 30 rooms, 2,000 square feet of indoor and outdoor event space
One of the premier attractions of Southwest Virginia is the Appalachian Trail, which runs through 14 states and through the heart of the region. SWVA is also home to the 300-mile gospel, blues and bluegrass music heritage trail The Crooked Road and Bristol’s Birthplace of Country Music Museum. In Damascus, up to 20,000 people attend the Appalachian Trail Days Festival each year. On Nov. 14, the Hard Rock Hotel & Casino Bristol is set to host a grand opening of its $515 million permanent facility, including the Hard Rock Live entertainment venue. For live stage performances, visit The Barter Theatre in Abingdon, the nation’s longest-running Actors’ Equity theater.
With power consumption by data centers and AI projected to more than quadruple in Virginia in the next 15 years, Amazon.com and Dominion Energy Virginia have entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Station in Louisa County, the two companies announced during an Oct. 16 event at Amazon’s HQ2 East Coast headquarters in Arlington County.
Dominion and Amazon’s memorandum of understanding means the companies will “jointly explore innovative ways to advance SMR development and financing while also mitigating potential cost and development risks for customers and capital providers,” according to Dominion’s announcement.
Gov. Glenn Youngkin, U.S. Sens. Tim Kaine and Mark Warner and Dominion Energy Virginia President Ed Baine were at the event, among other state and national dignitaries.
“Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers, while helping us progress toward our Climate Pledge commitment to be net-zero carbon across our operation by 2040,” Amazon Web Services CEO Matt Garman said in a statement.
Only two SMRs are in operation worldwide — one in Russia and the other in China — and Virginia likely won’t have its own SMR before the mid-2030s.
Over the past couple of years, SMRs have been a big part of Virginia’s energy conversation, especially as data center growth has put more demands on the state’s power grid. In a May earnings call, Dominion Energy CEO Bob Blue said that the utility is receiving more requests to power larger data center campuses with increased energy demands of 60 to 90 megawatts per building, or several gigawatts for multibuilding campuses.
“There are a number of things that are driving energy demand within Virginia,”Baine says. “Data centers [are] absolutely one of the big ones, but there’s also manufacturer electrification that is also increasing demand.”
Dominion announced in July that it had issued a request for proposals to evaluate the feasibility for a small nuclear reactor to be developed at its North Anna power plant, where it has two conventional, large nuclear reactors.
In October’s agreement, Amazon has agreed to explore the development of an SMR project near North Anna, bringing “at least 300 megawatts of power to the Virginia region, where Dominion projects that power demands will increase by 85% over the next 15 years.”
Powhatan County has approved an estimated $2.7 billion data center campus on 119.9 acres partly bordering Chesterfield County.
The county’s board of supervisors voted 3-2 during its Oct. 28 meeting for a rezoning and a conditional use permit allowing the proposed development to move forward.
The developer, Newport Beach, California–based Province Group, estimates that its capital investment at full real estate buildout would be $3 billion, but county staff estimates the full investment would be $2.7 billion based on Richmond region square footage values. The project buildout is expected to take five years at minimum.
The data center campus, located at 1318 Page Road, would have three detached data centers with a combined 1.525 million in floor area square footage, as well as six supporting structures. About 20% of the property — roughly 24 acres — will be designated open space.
The conditional use permit that the board approved will allow the developer to build structures up to 75 feet high, rather than being capped at a height of 45 feet.
The development would create 150 to 200 on-site jobs and up to 600 indirect jobs, according to a presentation from the applicant during the board meeting, although a Mangum Economics study projects it would create 165 direct jobs.
Based on the Mangum study, data centers on the property would directly pay $17 million in taxes to the county by 2034, and the county’s total annual tax revenue, including indirect taxes from activity the data centers support, would be $21.5 million.
Harold L. Ellis III and Christina W. Ellis own the land. They previously proposed a mixed-use development including up to 249 residential units for the property, which the county board of supervisors rejected in 2019.
The Powhatan Planning Commission held a work session for the data center campus proposal in May. It recommended denying the rezoning and conditional use permit in its Sept. 3 meeting.
Several county residents who spoke during the public hearing period and a supervisor said they were concerned that the project had no end user and has a provision for numerous possible other uses.
In its proffer, the developer outlined an 18-month period during which the only approved land use would be the data center campus, but after that period, the property could be used for data centers or for one or more of the 45 permitted uses it listed.
To secure an end user, “we need to go to market,” Province Group CEO Mark Kerslake said to the county board. “In order to go to market, we need our zoning approval. The users — occupiers, as we call them — have many sites being thrown at them. They won’t engage unless we have zoning approval.”
In response, Powhatan Supervisor Mark Kinney said the $17 million tax revenue projection depends on the project being fully built out.
“The $17 million is projected, and that’s if all three buildings are built out, they get a user that wants all three [and] all three buildings are packed to capacity with servers. Well, you know what comes after ‘if’ — ‘but,’” he said. “But what if they get a smaller user and there’s only one building, and [the user] only uses half the server capacity of that current building? Well, then your revenue goes down.”
In Northern Virginia, around 300 data centers are sprawled across Loudoun, Prince William and Fairfax counties, with the majority in Loudoun. The Ashburn area in Loudoun is home to the world’s largest concentration of data centers, a zone known as Data Center Alley, through which passes more than 70% of the world’s internet traffic. The Prince William Digital Gateway, if completed as planned, would be the largest data center complex in the world.
Central Virginia, though, is also seeing increased data center development. Henrico County is home to QTS Data Centers’ network access point, as well as Meta data centers. QTS also purchased 622 acres from Hourigan after the land was rezoned to light industrial.
Data center opponents argue the centers strain the state’s electric grid. Dominion Energy has previously estimated that Virginia data centers’ demand for electricity will jump from the 2.8 gigawatts it was in 2023 to 13 gigawatts by 2038.
The approved Powhatan data centers would use an anticipated 300 megawatts of electricity at full capacity. Dominion Energy will supply the facility, which will require building a substation.
According to a Dominion letter to the county’s economic development manager, the Fortune 500 utility expects distribution line upgrades to take about 18 months, for an expansion and upgrade of the existing substation to take about three years and for the construction of a new substation and transmission line to take about four years.
Earlier this month, Dominion Energy Virginia and Amazon.com announced they’d entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Plant in Louisa County that could bring “at least 300 megawatts of power to the Virginia region.”
With power consumption by data centers and AI projected to more than quadruple in Virginia in the next 15 years, Amazon.com and Dominion Energy Virginia have entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Plant in Louisa County, the two companies announced at an event Wednesday at Amazon’s HQ2 East Coast headquarters in Arlington County.
Dominion and Amazon’s memorandum of understanding means the companies will “jointly explore innovative ways to advance SMR development and financing while also mitigating potential cost and development risks for customers and capital providers,” according to Dominion’s announcement.
“This is a milestone along the path,” Amazon Web Services CEO Matt Garman said at Wednesday’s event. “There’s a ton that we need to do between here and there, and there’s a lot of work that needs to go into this, but this is a really important milestone that we’re celebrating today.”
At Wednesday morning’s event, Gov. Glenn Youngkin, U.S. Sens. Tim Kaine and Mark Warner and Dominion Energy Virginia President Ed Baine were on hand, among other state and national dignitaries.
“I am thrilled that Virginia is among the first states to take this big step,” Youngkin said. “Just two-and-a-half years ago, Virginia was literally accelerating on what has been an uninterrupted renaissance in growth, job growth and investment by companies who’ve committed $83 billion to expand or come to Virginia, and hire more people than we’ve ever had working before in the history of the commonwealth.”
He noted that the state is “poised to take this giant step with our partners,” as home to the nuclear Navy, multiple research universities and Dominion.
In his comments, Kaine also mentioned Lynchburg-based nuclear fuel producer BWX Technologies and Framatome Inc., the North American subsidiary of the French nuclear equipment, services and fuel producer, as other significant players in Virginia’s nuclear energy sector. “Amazon is the largest power user in the United States,” Kaine said. “That AWS is here, and that AWS is endeavoring to help us advance our innovation together with these other innovators in Virginia makes perfect sense.”
As of now, only two SMRs are in operation — one in Russia and the other in China — and Virginia likely won’t have its own SMR before the mid-2030s.
Warner, who chairs the Senate’s Select Committee on Intelligence, said Wednesday that energy innovation is important also as a matter of national security, particularly as the U.S. races to catch up with China’s innovations. “National security is not simply the nation state that has the most tanks and guns and ships and planes, but increasingly, it’s going to be who can win the battle in technology competition.” China, he added, is constructing “30 nuclear plants even as we speak. They have a goal of adding 150 more by 2035.”
However, he said, Virginia is “the nuclear capital for the country,” with 100,000 people already working in the nuclear sector in the commonwealth, including sailors, university researchers and employees at BWXT, Framatome, Huntington Ingalls Industries and other companies.
Ambitious plans
Amazon’s agreement with Dominion was just part of its news Wednesday, as the global e-tail giant announced it has signed three agreements to support development of small modular reactors, or SMRs, including one in the state of Washington with Energy Northwest, to develop four advanced SMRs. According to Amazon’s announcement, the four reactors would generate roughly 960 megawatts of electricity at full operation, beginning in the early 2030s. Amazon, which in March acquired a nuclear-powered data center campus in Pennsylvania from Talen Energy, also has committed to invest in SMR developer X-energy, whose reactor design will be used in the Energy Northwest project.
“Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers, while helping us progress toward our Climate Pledge commitment to be net-zero carbon across our operation by 2040,” Garman said in a statement released Wednesday morning.
Dominion previously announced in July that it had issued a request for proposals to evaluate the feasibility for a small nuclear reactor to be developed at its North Anna power plant, where it has two conventional, large nuclear reactors. Nuclear technology companies received the RFP, which was not a guarantee to build an SMR but would be the first step in exploring whether such a step was feasible, the Fortune 500 utility said in July.
On Wednesday, Dominion Energy Virginia’s Baine said that the “site is well on its way to be able to be developed,” and that he expects Dominion to make a decision on the winning proposal before the end of the year. He also said that X-energy is among the companies that have submitted a proposal.
The RFP, Baine added, will “inform us how we want to move forward with companies for additional small modular reactors as well.”
Virginia Secretary of Commerce and Trade Caren Merrick said Wednesday that she expects Youngkin to soon issue an executive order about accelerating permitting for nuclear sites, and the state has invited X-energy to come to Virginia for manufacturing.
Competitor Google preempted Amazon’s announcement by a day, announcing on Tuesday that the tech company had reached an agreement with Kairos Power to develop and purchase 500 megawatts of power from six to seven SMRs, planned to come online between 2030 and 2035. And in September, Microsoft forged a deal with Constellation Energy to offset power consumption by its data centers by reviving a portion of the Three Mile Island power plant, the Pennsylvania facility that in 1979 experienced a partial nuclear meltdown, the worst nuclear disaster in U.S. history.
Moving toward nuclear in Va.
Over the past couple of years, SMRs have been a big part of Virginia’s energy conversation, especially as data center growth has put more demands on the state’s power grid.
According to Dominion’s Integrated Resource Plan, filed Tuesday with the Virginia State Corporation Commission and the North Carolina Utilities Commission, power demand in Dominion’s coverage area in Virginia and North Carolina is expected to grow 5.5% annually over the next decade and double by 2039. Dominion has previously predicted that the data center industry in the state will demand 13 gigawatts of electricity by 2038, nearly five times the 2.8 gigawatts it used in 2023.
In Virginia, Amazon has agreed to explore the development of an SMR project near North Anna, bringing “at least 300 megawatts of power to the Virginia region, where Dominion projects that power demands will increase by 85% over the next 15 years,” according to Amazon’s news release. Additionally, Amazon signed an agreement to place a new data center next to a nuclear facility in Pennsylvania, a carbon-free energy source to power the data center.
In Loudoun County’s Ashburn area, where more than 70% of the world’s internet traffic courses through a corridor known as Data Center Alley, Amazon Web Services is the biggest fish in a gigantic pool. From 2011 to 2021, AWS invested more than $51.9 billion in Virginia, including building data centers. In January 2023, the company had at least 65 data centers in Loudoun in operation or under development, out of more than 200 data centers in the county, and AWS announced it planned to invest $35 billion by 2040 to build more data center campuses across the state.
Nationally, it’s anticipated that data centers will account for 17% of energy usage nationwide by 2030, according to a Bloomberg Intelligence report. That’s up from 4% in 2022 and 6% in 2026, according to data and projections from the International Energy Agency.
U.S. Secretary of Energy Jennifer Granholm, speaking at Wednesday’s event, called Virginia “the go-to place for the concentration of data centers,” and noted that AWS is the latest company to do “BYOP,” or “bring your own power” for data centers. “And this is the important piece I mentioned, that the technology companies know that in order for these data centers to achieve great community buy-in, bringing their own power with them is an important piece of that, so the rates are not raised on everyday citizens.”
She added that the Department of Energy is announcing $900 million in funding “for those who want to deploy even more … small modular reactors,” referring to applications opening for a program to support the first commercial-use SMR in the United States.
In the past couple of years, as artificial intelligence usage and overall digital use has grown, so has demand on Virginia’s power supply. In a May earnings call, Dominion Energy CEO Bob Blue said that the utility is receiving more requests to power larger data center campuses with larger energy demands of 60 to 90 megawatts per building, or several gigawatts for multibuilding campuses.
Baine said in an interview Wednesday that “there are a number of things that are driving energy demand within Virginia. Data centers [are] absolutely one of the big ones, but there’s also manufacturer electrification that is also increasing demand.”
The Joint Legislative Audit and Review Commission (JLARC) is conducting a study on data centers as some state legislators are pushing for high-volume power users to cover infrastructure costs to keep the state’s power grid reliable. The Virginia General Assembly forwarded all data center-related bills to 2025’s session so lawmakers could take JLARC’s study — expected to be released in November — into consideration.
Freelance writer Courtney Mabeus-Brown and Virginia Business Editor Richard Foster contributed to this story.
It hasn’t exactly been smooth sailing for Chuck Kuhn lately as he tries to rezone land for flex industrial use in Leesburg and Purcellville.
The CEO of JK Moving Services and JK Land Holdings, Kuhn is one of Northern Virginia’s most prominent data center developers and land conservationists, having purchased swathes of property in Loudoun County to keep the land rural. But his reputation as a data center builder has run into growing opposition from residents who oppose more data center development in Northern Virginia.
In Leesburg, Kuhn has proposed to rezone and redevelop the 7.6-acre site of the shuttered Westpark Golf Club hotel and conference center into an 86,400-square-foot flex industrial building. The site neighbors a golf course that Kuhn sold to Loudoun County in 2022 to be turned into a public park.
Kuhn’s development proposal — approved 5-2 by the town council in July — faced scrutiny over the project’s scale and appearance, as well as truck noise levels.
Another concern was whether the building would become yet another data center; Kuhn’s team later changed the plan to exclude data centers as a permitted use for the land.
Work on the building’s site plan and design are underway, and in mid-August, Kuhn said he expects both proposals to be presented to the town for approval by late September. “We’re hoping that we’re demolishing the old building within the next six months,” Kuhn said.
Progress in Purcellville has not gotten as far.
Town council members there voted 4-3 in late July to continue gathering information before deciding on Kuhn’s application to annex and rezone land outside town to develop the Valley Commerce Center. Like Kuhn’s proposal in Leesburg, he has offered a plan that would not include a data center.
Concerns with the Valley Commerce project include water usage, location suitability and traffic increases, according to Purcellville Town Council member Caleb Stought, who voted against the application.
Kuhn’s project will add an estimated3,500 trips per day to roads “that are already prone to significant congestion and gridlock,”Stought says.
Kuhn has also filed a rezoning application with Loudoun County. In August, JK Land Holdings purchased the 25-acre Telos Corp. headquarters site in Ashburn for $60 million — and that could be a potential space to develop data centers, although Kuhn hasn’t said what he intends for the site.
With more than 70% of global internet traffic flowing through Virginia data centers — mostly in Loudoun County — the commonwealth is the world’s undisputed data center capital. And Tom Gallagher’s development group wants Pittsylvania County to claim a stake in that action.
Gallagher represents Anchorstone Advisors SOVA, the developer planning to build a potential $1 billion-plus data center campus on a 946-acre tract in Ringgold. During its July 16 meeting, the Pittsylvania County Board of Supervisors unanimously voted to rezone the tract for heavy industrial use to allow for the project. Construction could begin on the project’s first phase by mid-2025 to early 2026.
Currently, the only hyperscale data center campus in Southern Virginia is the 1.1-million-square-foot Microsoft data center complex in Boydton, about an hour east in Mecklenburg County.
“I think it’s a golden opportunity for [Pittsylvania] to get in on the game,” says Gallagher, who is also a principal in a $550 million mixed-use development proposed for Pittsylvania’s Axton area.
No tenant has been announced for the data center campus yet, but Pittsylvania’s economic development director, Matt Rowe, hopes Anchorstone’s project will be “the tip of the spear” for attracting more data centers southward.
“We recognize there’s tremendous opportunity for Southern Virginia when it comes to attracting hyperscale data centers,” Rowe says. “Northern Virginia is pretty much tapped out from a power standpoint [and] from a land standpoint, so we … become the next best option,” due to the region’s available land, low tax rates and proximity to subsea high-speed internet cables in Hampton Roads and QTS’s network access point in Henrico County.
“Counties like ours need the types of direct [tax] revenue that come from these projects,” says Rowe, “and we have the available land mass and space where they can do it at scale without impacting a lot of adjacent property owners.”
That said, some residents did express concerns to the county about potential increases in traffic, light and noise that might come from Anchorstone’s data center campus, which is expected to receive its data center use permit from the county Board of Zoning Appeals by year’s end.
Anchorstone has agreed to comply with county noise ordinances and to reduce light pollution, says Gallagher, noting that the campus also will have direct access to U.S. Route 58, so it won’t impact residential roads. “Most [residents] won’t even know it’s there.”
LL Flooring has sold its eastern Henrico County distribution center to a limited liability company for $104.75 million, according to documents the Henrico-based flooring company filed with the Securities and Exchange Commission on Tuesday.
Formerly known as Lumber Liquidators, LL Flooring filed for bankruptcy in August and announced it was pursuing a sale of its business, according to SEC documents. Before entering Chapter 11 bankruptcy proceedings, however, the company worked with JLL to find a buyer for its 995,792-square-foot distribution center on 97.55 acres in Sandston.
SNA NE LLC, a Delaware limited liability company, is the buyer of that property, and according to federal bankruptcy court documents, is “the largest landowner in the White Oak Technology Park,” where the LL Flooring property is located. In a document filed with the U.S. Bankruptcy Court in Delaware on Aug. 30, Chad Williams signed an agreement as CEO of the purchaser, SNA NE LLC. Williams is chairman and CEO of Kansas-based QTS Data Centers, which has built a data center campus in Henrico County’s White Oak Technology Park and announced in 2022 plans to expand it by 1.5 million square feet. As of July, QTS has purchased all 622 acres of White Oak Technology Park II but did not share project details.
Under the LL Flooring contract’s terms, the buyer will lease back the building to LL Flooring for six months at no cost, and the flooring company can terminate the lease on 60 days’ notice. The deal must be approved by U.S. Bankruptcy Court Judge Brendan L. Shannon, and the parties are set to hold a hearing Wednesday. The transaction is expected to close Sept. 30.
According to Henrico County property records, an LLC connected with LL Flooring owns the 97.55-acre property at 6115 Technology Creek Drive, which is adjacent to two plots of land owned by QTS Data Centers.
In its August bankruptcy filing, LL Flooring said it planned to close 94 stores out of its more than 300 stores across the country. In 2019, LL Flooring was forced to pay $33 million to settle allegations of securities fraud, and sales fell in fiscal 2023 to $904.7 million, down from $1.11 billion in fiscal 2022. In June 2023, LL Flooring’s board rejected an unsolicited acquisition proposal from Cabinets to Go, a subsidiary of F9 Brands, which then began a proxy fight.
Representatives for LL Flooring and Henrico County declined to comment on the transaction, and QTS did not respond immediately to a request for comment.
A Dallas-based developer seeking to build its fourth data center campus in Virginia had a problem.
Finding sites large enough was getting difficult in Northern Virginia, where DataBank has two locations in Ashburn’s Data Center Alley and one in McLean.
“Virginia is still a solid data center market,” says DataBank Chief Operating Officer Joe Minarik. “We looked around and said, ‘Hey, where’s expansion still growing and land [still] available?’”
DataBank found 85 acres where it plans to break ground by early 2025 in the 690-acre Culpeper Technology Zone (CTZ). It offers access to fiber, electricity, incentives and workforce training.
“Culpeper tipped the scale for our ability to get there,” Minarik says. “And it’s already starting to develop. You’re seeing other data center providers grow theirs there.”
Those include Peterson Cos., Cielo Digital Infrastructure, CloudHQ and Copper Ridge. Additionally, Red Ace Capital Management received county approval July 2 to locate in the zone.
Culpeper County created the CTZ in 2021 to consolidate data center development in one place, streamlining power needs and curtailing expansion elsewhere. Developers who invest $10 million and hire at least 10 new employees there get a tax rebate of 40% over a five-year period, says Bryan Rothamel, Culpeper’s economic development director.
Also located in the CTZ are the Culpeper Technical Education Center and the Daniel Technology Center, offering trades and IT training relevant to building and maintaining data centers.
DataBank plans to build three facilities totaling 1.4 million square feet in the CTZ, with the first coming online around 2027 or 2028. It’ll need hundreds of workers to build them, and then 50 to 60 people to manage each building. Tenants will bring their own IT staff. Having nearby schools provide workforce training is a plus, Minarik says.
The CTZ also ticked boxes for Peterson Cos., a Fairfax-based real estate developer with 10 other data center projects. The zone’s ordinance anticipates the needs of data centers, and the CTZ isn’t near schools and dense residential development, so developers face less opposition, says Adam Cook, Peterson’s managing director of development.
Peterson won approval in 2023 to build eight data centers totaling over 2.05 million square feet on 150 acres there.
“Staff members and elected officials have listened to their community and preserved the rural nature of their community, while still making space for data centers,” Cook says. “It’s really a tribute to fantastic leadership.”
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