As the demand for digital infrastructures and AI technologies continues to rise, the Richmond region has seen remarkable growth in its data center market, sparking both economic opportunities and power supply challenges. The rapid expansion of data centers in this area supports the burgeoning digital economy but has given rise to concerns about the increased electricity requirements and the potential impact on local residents. Recent findings from the Joint Legislative Audit and Review Commission (JLARC) suggest that unchecked growth could result in Virginia’s power demand doubling within a decade, potentially raising monthly energy bills for Dominion Energy customers by $14 to $37 by 2040.
Data Center Proliferation in Richmond
The Richmond area is currently home to 53 data centers, positioning it as the region with the second-most significant concentration of such facilities in Virginia, closely following Northern Virginia with its massive count of 537 data centers. This surge in data centers is not confined to remote areas; a significant percentage are located near residential zones. In Chesterfield and Henrico, 38% of these facilities are situated within 500 feet of residential properties, prompting local resistance to new proposals. This phenomenon illustrates the delicate balance between expanding digital infrastructure and maintaining the quality of life for residents.
Colorado-based development firm Tract has further propelled Richmond’s data center frenzy by applying for rezoning to construct up to 11 new data centers on 700 acres in Chesterfield. This proposal is part of a broader trend and follows Tract’s earlier success in rezoning 1,200 acres in Hanover for multiple data centers. Additionally, other projects have been approved in Chesterfield, Henrico, and Powhatan, including a significant $2.7 billion undertaking. The relentless pursuit of development underscores the fierce competition among regions to offer cutting-edge digital infrastructure and attract technological investments.
Economic Impact and Community Challenges
Despite the concerns raised, the data centers confer notable economic benefits on the Richmond region. Once constructed, these facilities provide a limited number of high-paying, long-term jobs, substantially contributing to the local economy. Moreover, these centers significantly bolster local tax revenues, with areas like Henrico utilizing these funds to support various community initiatives, including affordable housing projects that cater to the needs of the local populace. This economic infusion strengthens the region’s overall financial health and promotes sustainable development within the community.
Nonetheless, the economic advantages come with considerable challenges. The increased electricity demand from data centers could strain the power infrastructure, leading to inflated energy costs for local residents. With projections of power requirements potentially doubling within a decade, residents, particularly Dominion Energy customers, could face monthly bill increases ranging from $14 to $37 by 2040. This cost escalation has garnered the attention of legislators, residents, and energy experts, igniting debates on how to balance the benefits of data center growth with the sustainability of community power resources.
Legislative Efforts to Balance Growth
As the demand for digital infrastructures and AI technologies grows, the Richmond region has experienced notable expansion in its data center market. This growth creates new economic opportunities but also poses challenges regarding electricity supply. The rapid increase in data centers bolsters the expanding digital economy, yet sparks concerns about higher electricity needs and impacts on local communities. According to the Joint Legislative Audit and Review Commission (JLARC), if this growth continues without regulation, Virginia’s power demand could double within a decade. This surge could increase monthly energy bills for Dominion Energy customers by $14 to $37 by 2040. Alongside power supply difficulties, there’s a broader conversation about balancing economic advancement with sustainable development and residents’ quality of life. The Richmond area’s challenge lies in capitalizing on the digital economy while addressing the infrastructure demands and ensuring a stable, affordable power supply for its inhabitants.
