One hyperscale data center can use as much electricity as 100,000 homes, and Virginia is host to more of these than anywhere else in the world. That concentration-643 sites as of October 2025-has turned the state into the epicenter of a collision between economic growth and grid capacity, driving up consumer power bills and straining infrastructure.
Governor-elect Abigail Spanberger has warned that without decisive action, Virginia is “headed into an energy crisis.” Her plan takes aim at the largest users of energy, especially data centers, which would pay what she calls their “fair share” for the generation and transmission infrastructure built to power them. The plan also proposes expanding local energy production and storage efficiency while increasing access to subsidies for low-income households.
The urgency is underlined by independent forecasts showing unconstrained demand could double Virginia’s electricity needs within a decade, with the data center industry as the primary driver. In 2024, these facilities consumed 26% of the state’s total electricity supply, a share unmatched in the US. The International Energy Agency projects that national data center consumption will rise from 183 terawatt-hours in 2024 to 426 TWh by 2030 a 133% increase placing further pressure on states like Virginia where facilities are clustered.
Much of this energy powers AI-optimized servers equipped with high-performance chips requiring two to four times as much wattage as standard processors. Very often, cooling systems represent another heavy load: in some facilities, up to more than 30%. Water-intensive cooling at many hyperscale sites is going to keep climbing: US data centers in 2023 used 17 billion gallons annually, a number expected to almost double by 2028.
Spanberger’s approach is in line with calls by legislators and advocacy groups to insulate ratepayers from the costs of new transmission lines and substations. Under Dominion Energy’s pending rate case, data centers would be placed in a separate customer class, facing demand charges of 85% for transmission and distribution and 60% for generation, locked into 14-year contracts. The State Corporation Commission has yet to rule on the matter, but the company’s proposal reflects a growing consensus that infrastructure costs should be borne by the industry itself.
Engineering solutions are part of the conversation, too. Energy-efficient data center designs, such as advanced air and liquid cooling, optimized server layouts, and waste heat recovery, can cut electricity use by double-digit percentages. Grid-scale battery storage capable of dispatching stored solar or wind during peak demand provides another lever, although deployment in Virginia remains limited. The JLARC report noted that meeting even half of the projected demand while complying with the Virginia Clean Economy Act would take several times the current installed battery capacity, alongside aggressive wind and solar expansion.
Land use disputes and supply chain constraints complicate further integration of renewables. Utility-scale solar is still the fastest to deploy, but rural opposition and agricultural land preservation concerns slow project approvals. The potential for offshore wind is considerable, but the capacity procured to date is far from what would be required in high-demand scenarios. Nuclear power, especially Small Modular Reactors, is considered as a carbon-free baseload source; however, no SMRs are operating in the US, and the earliest projected deployment by Dominion is 2035.
The stakes run far beyond electricity bills. Overbuilding generation and transmission to meet speculative demand risks stranded assets if data center growth slows, leaving utilities-and, ultimately, consumers-paying for unused infrastructure. Conversely, underbuilding would force reliance on imported power, exposing Virginia to volatile wholesale prices in the PJM market.
Spanberger’s plan also emphasizes efficiency programs and demand-side management, areas in which Virginia is lagging. According to George Mason University’s Center for Energy Science and Policy, such measures can deliver significant savings at lower cost than new generation but require stronger policy support and public engagement. Already, the Center’s model for a Local Energy Action Plan has helped municipalities create achievable energy strategies, and scaling it statewide could build resilience into the grid while tempering demand growth.
This is the challenge for Virginia: balancing its role as a global data center hub with engineering realities ranging from grid capacity and generation mix to environmental commitments. Whether the digital economy strengthens or overwhelms the future of the state will be determined by how willing the next administration is to take on the technical and economic dimensions of this issue.
