Virginia’s 2024 Legislative Session Ends Without Action on Looming Energy Crisis
Virginia’s 2024 legislative session came to a close last month, leaving the state facing an imminent energy crisis as the proliferation of power-hungry data centers in Northern Virginia and around the state continues unchecked. Despite the urgent need for action to address the energy and transmission capacity challenges brought about by the rapid growth of data centers, the state’s utilities remain ill-prepared to handle the surge in energy consumption.
Dominion Energy, the state’s largest utility, projects a doubling of CO2 emissions and plans to ramp up its use of expensive and highly polluting fossil fuels to meet the growing demand. In its 2023 Integrated Resource Plan (IRP), Dominion acknowledged that this approach will push up carbon emissions, contradicting the Virginia Clean Economy Act’s mandate to transition towards renewable energy sources and reduce carbon emissions.
Data from regional grid operator PJM indicates that half of the projected surge in energy demand will occur in areas served by Dominion Energy. Similarly, Virginia electric cooperatives, such as Northern Virginia Electric Cooperative (NOVEC), are also expected to experience significant growth in data center-related energy consumption. Despite these alarming trends, the General Assembly passed new tax breaks in 2023, further incentivizing data center expansion while turning away proposals that could have mitigated the impact on consumers and the environment.
The legislature rejected bills that would have facilitated the development of renewable energy and promoted energy efficiency, opting instead to grant Dominion Energy and Appalachian Power the authority to pursue the development of small nuclear reactors. However, critics argue that this short-term solution is insufficient to address the immediate energy crisis posed by the skyrocketing demand from data centers.
In response to calls for action, General Assembly leaders have deferred action on addressing data center demand until a study by the Joint Legislative Audit and Review Commission (JLARC) is completed. While the study aims to provide insights into the best course of action for managing energy demand, lawmakers have failed to halt new data center development pending the study’s completion, raising concerns about the potential environmental and public health risks associated with the unchecked growth in data center operations.
Environmental advocates have raised alarms about the potential consequences of inaction, citing a previous proposal by the Virginia Department of Environmental Quality (DEQ) to allow data centers to operate high-polluting diesel generators to meet energy demand during grid stress. The proposal, which was met with public outcry and subsequently shelved, underscores the need for proactive measures to address energy demand without compromising air quality and public health.
Efforts to impose stricter regulations on data center development, including requirements for renewable energy microgrids and battery storage, have been met with resistance from industry stakeholders and lawmakers. Despite the potential benefits of implementing cleaner and more sustainable energy solutions, the state’s current approach to addressing energy demand remains focused on traditional fossil fuel-based sources.
As Virginia grapples with the challenges posed by the rapid expansion of data centers, calls for more proactive and sustainable energy policies have grown louder. Advocates argue that a pause in data center development, coupled with a comprehensive review of energy demand and consumption patterns, is essential to averting a looming energy crisis and ensuring a sustainable energy future for the state.
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