The US's biggest datacenter market is short on electricity

Power transmission bottlenecks could delay Northern Virginia DC projects into 2026


Updated The largest datacenter market in the US is running into trouble: There isn't enough power transmission capacity in the region to handle all the bit barn projects.

That's the word from Andy Power, president and CFO at Digital Realty, a real estate investment trust that owns and maintains more than 290 datacenters around the globe. Power shared the news, which he described as "very recently breaking" in an earnings call yesterday.

Dominion Energy, the primary power provider in that market, Power said, had contacted Digital Realty and its other major customers in the region to inform them of a "pinch point" in eastern Loudoun County, Virginia, that could result in delivery delays stretching all the way to 2026.

"If this is to come to fruition as we recently learned, it will obviously likely be a slowdown in delivery of new supply in what is our largest and the largest and most consistently in demand datacenter market in the world," Power said.

The apparent cause isn't due to electricity generation, Power said, but transmission – there simply aren't enough lines to move enough energy. 

Loudon County describes itself as the largest concentration of datacenters in the world, and with more than 25 million square feet of datacenter space and four million more in development, it might be right. 

"Much of the world's internet traffic passes through Loudoun's digital infrastructure, making us a key player in the world's technology economy," Loudon County said. Loudoun's FY 2023 tax projections predict $576 million from datacenter property taxes (the biggest single source and nearly a third of the county's total property tax revenue), meaning a four-year delay could be incredibly costly. Loudoun County said that datacenter taxes are enough to cover the County government's entire operating expenses. 

A delay in Loudoun County could also mean many datacenter projects planned in the area shift to neighboring Prince William County, or could hop across the border into Frederick County, Maryland. Both counties have tried to market themselves as prime datacenter locations and also have ongoing construction projects.

It's unclear whether power transmission issues affecting Loudoun County would affect them as well, but Dominion, which serves much of northern Virginia, appears to cover Prince William County based on maps of the area [PDF]. Frederick County is not on the same grid. 

The PJM Interconnect, which manages the electrical grid in the eastern US between Virginia and New Jersey and west to Ohio and portions of Michigan, has warned of transmission problems in Dominion's northern Virginia transmission zone (where Loudoun and Prince William are located). 

"The Datacenter Alley located in northern Virginia in the Dominion Transmission Zone is experiencing unprecedented load growth driven by increases in datacenter load that started in 2018 and is expected to continue growing post 2027," PJM said in a memo published earlier this month.

The transmission problem appears to lie in how PJM planned new grid infrastructure in Dominion's northern Virginia zone: It's 2027 regional transmission expansion plan (RTEP) wasn't ready while it was considering what projects it would need to keep up with demand. 

By 2025's RTEP, plans that had already been put forward by Dominion were sufficient to meet rising needs. "Once the PJM load forecast was updated for the 2027 RTEP, the system showed a need for reinforcements through additional source(s) to serve the load increase," PJM said. 

How short will the region be? According to PJM's 2027 RTEP, there could be a "load drop of more than 300 MW with all planned supplemental and baseline reinforcements incorporated."

The Digital Realty CFO sees energy shortcomings as an opportunity for a win, provided it can be one of the companies that comes out on top as developers struggle to bring new inventory online in the region. 

According to Power, Digital Realty could gain "a sense of greater pricing power and higher rates tied to the sharp reduction of near-term availability."  Along with that, he sees an opportunity to emerge as a key partner in helping Dominion solve its power problems in the region.

Power said the company is the largest, most consistent Dominion customer in the region.

"We have substations and power infrastructure already built on our campuses … I think we are a very important player in that market to help the power company address this problem given our strategically important land parcels and easement." ®

Updated to add

"The datacenter industry has grown substantially in Northern Virginia in recent years, and we've made significant investments in new infrastructure to meet the growing demand for electricity," a Dominion spokesperson told The Register.

"That growth is now accelerating, which is resulting in transmission constraints in a pocket of eastern Loudoun County that will impact new connections for large customers. This will not impact residential or small business customers. We have been actively engaged with our customers and other stakeholders to raise awareness about the issue and discuss solutions to alleviate the constraints as quickly as possible."


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