Why Should Delaware Care?
The developer of the proposed data center near Delaware City submitted the first official plan for the project, beginning what will likely be a long, controversial battle to get the project approved by the county.
The company proposing to build a massive and energy-hungry data center near the Delaware City Refinery submitted exploratory plans to New Castle County on Friday, officially starting the regulatory review of a proposal that has already drawn opposition from hundreds of people in the state.
The official plans show how the first phase of the development would include six buildings – each about 500,000 square feet and two-stories tall. Six additional properties adjacent to the buildings are designated as “electrical yards.”
The electrical yards highlight the massive amounts of energy that the modern data center would consume as many expect it to power the latest revolution in artificial intelligent technologies.
Starwood Digital Ventures, the company behind the proposal, has said the future data center could use as much as 1.2 gigawatts of electricity per hour – an amount that would power nearly twice the amount of homes that exist in Delaware.
But critics of the project point to energy usage as the problem. They worry it could pile increased demand onto a regional electricity grid that already faces a supply crunch and surging prices.
Among the critics is Delaware House Speaker Melissa Minor-Brown, who recently called on New Castle County to vote against the project.
“Until Delaware has a plan for a long-term reliable source of energy, I’m not sure it’s a good idea to bring in an organization that is going to drain this much energy,” Minor-Brown said.
Despite the pushback, Starwood – and its apparent partner in the project, PBF Energy – are moving forward with the plans.
During a call with investors last week, PBF Energy CEO Matthew Lucey was asked about his company’s role in the venture and whether the Delaware City Refinery, which PBF Energy owns, could provide electricity to the project.
Lucey was vague in his response, but said “we’re exploring ways in which we can maximize value for our shareholders.”
“We have been working with Starwood, who has been an excellent subject matter expert. They’ve done such projects in the past. We don’t have anything formal to announce at the moment, but we’ll continue to develop opportunities in Delaware,” Lucey said.
While many details of the data center project are not yet known, the benefits of it to Starwood and PBF are clear. Massive of amounts of money have been thrown at data centers recently as tech giants all race to become king of what they expect to become an AI revolution.
On Monday, the Washington Post reported that Google, Meta, Amazon and Microsoft are on track to spend an unprecedented $350 billion on building and equipping AI data centers this year alone.
The infrastructure underpins a wave of new AI products, including prominent publicly available ones like ChatGPT, Google Gemini and Microsoft CoPilot.
In a presentation at a recent town hall meeting, Starwood CEO Anthony Balestrieri did not say which company or companies might use the Delaware City data center, but said Starwood has worked with a wide variety of users.
“We serve everything from financial institutions, cloud service providers, internet companies, health care, all of the above,” Balestrieri said.
What’s next?
Starwood submitted its Phase 1 exploratory plans on Friday, just days before the New Castle County Council is scheduled to consider new rules that would restrict how data centers can operate and be designed.
The timing of the submission means that the first phase of the project will be grandfathered under the current regulations, even if the county passes new rules before Starwood receives its approvals.
County Councilman Dave Carter proposed the new rules last week as part of an ordinance that came in response to the public outrage over Starwood’s proposal. The council will formally introduce the ordinance at a special meeting at 3 p.m. Tuesday.
While it won’t impact the first phase of the proposed data center, the legislation could still regulate the second phase of Starwood’s project, which is planned for a property that would have to be rezoned in order for it to be built.
And that rezoning will not happen quickly.
Days before Carter introduced his ordinance, New Castle County rejected Starwood’s request for an expedited approval process under the county’s JobsNow program.