Why Should Delaware Care?
Northern Virginia has the highest concentration of data centers in the world. As Delaware sees an influx of new data center proposals, the state can take lessons from a place that has reaped the massive economic benefits — and faced environmental and quality of life consequences.
For a year, Delawareans have wrestled with the economic question of the time: How would the global boom in the data center industry impact Delaware if it arrived in the state?
Would the electricity-hungry facilities damage the environment and spike energy bills? Or would the industry become an economic savior, supercharging New Castle County’s economy?
For now, those questions are only speculative, as none of the handful of massive data centers proposed in northern Delaware have secured all necessary approvals.
But a data center boom has already happened in a rural county 150 miles southwest of here — and last month, Spotlight Delaware visited that area to see firsthand how the facilities affected local communities.
Northern Virginia is the home to the largest concentration of data centers in the United States. There are 200 data centers in Loudoun County, Virginia alone — an amount beyond what Delaware will likely ever see.
Serving as host for the visit was Buddy Rizer, the economic development coordinator for Loudoun County – and the so-called ‘Godfather of Data Centers’ who facilitated the data center boom in the area.
“We’ve been able to completely remake our community,” Rizer said
Much of Virginia’s data center hub sits in the vicinity of Dulles International Airport where two-story, concrete behemoths line many of the roads. Drivers passing by see one large windowless structure after another, with partially-enclosed diesel generators on the sides of some.
While Rizer pointed to the economic benefits of the structures, Ann Bennett, a local Sierra Club official, listed their environmental costs.
She said that the harm to the local environment comes from heat radiating from thousands of computer servers, from emissions from backup diesel generators, and from water being pumped from rivers to cool the facilities.
And Loudoun County’s data centers are also too close to homes, she said.
“This is full-on industrial development that is happening near people,” said Bennett, the data center issues chair for the Virginia chapter of the Sierra Club.
Just beyond the area’s industrial corridor lie large swaths of parkland, brand-new schools and several community centers with pools and a plethora of fitness classes.
Rizer said the county was able to build those amenities while lowering property tax rates because of tax revenue data centers bring to the county.
“From an economic development standpoint, this is a huge win at a time when there are not many opportunities,” Rizer said.
In his conversations with Spotlight Delaware, Rizer also acknowledged that data center companies sometimes pay him to talk about the benefits of their facilities.
For example, Starwood Digital Ventures, the company behind a massive data center project near Delaware City, reimbursed his travel expenses to Dover when he came to speak to the state legislature.
But he also said he wants correct misconceptions people have about the data center industry — and help promote it so the United States can stay competitive in the growing sector.
A constant hum
Standing outside Digital Realty’s 62-megawatt data center in the middle of a Loudoun County industrial park, there was a low, droning sound, like a lawnmower.
“You can hear the airplane, it’s way louder,” Rizer said, as a plane taking off from the nearby Dulles airport flew overhead.
The plane passed, and the hum continued.
The Digital Realty data center is a one-story, concrete building that looks like it could be an office. It is much smaller than some of the modern data centers along the main corridor of Data Center Alley. It also is much smaller than the controversial proposal from Starwood Digital Ventures to build a 1.2 GW data center campus near Delaware City.
Still, the Digital Reality data center serves the same purpose as any other: it stores digital data and hosts computer infrastructure needed to run internet programs.
Any time people search something online, watch a movie on a streaming service or send an email, they are using a data center. The current boom in new data center construction is largely driven by artificial intelligence programs, which need more computing power than traditional search engines.
In the early days of data centers, tech companies built facilities that housed the computer infrastructure behind its own software. But with the advent of cloud computing in the early 2000s, companies could outsource these computing resources to third-party data centers that could be located anywhere in the country.
All that data storage and networking between systems happens in racks of computer servers. Like any computer, they get hot — and that heat is amplified due to the close proximity of all the other servers and their constant operation.
The Digital Realty data center uses reclaimed water from the local sewage treatment plant to cool the servers, causing the constant hum surrounding the building, said Digital Realty Sales Engineer Torbjörn Nyström during a limited tour of the facility.
The only place in the data center open to visitors was its “innovation hub” that showcased the industry’s latest technology, such as direct-to-chip cooling, which uses less energy and water than the traditional method of circulating chilled air through server racks.
Nyström said there are five levels of security clearance in the building, and not even he can get into the actual data halls. Many data centers have tight security because of their critical role in our daily lives — and because they host a vast amount of private data.
In the innovation hub, the hum from the cooling infrastructure became a roar.
The sound registered on a phone sonometer at about 70 decibels — about the same level of noise as a washing machine — but it felt louder. Nyström raised his voice as he explained the complex technology behind the resource-efficient cooling systems on display.
Julie Bolthouse, Director of Land Use at the Piedmont Environmental Council in Northern Virginia, said each type of cooling infrastructure emits different levels of noise, sometimes varying day to day.
“It can really drive folks absolutely nuts, because they can feel it and hear it inside their homes constantly all night long,” Bolthouse said.
But the worst noise in the area, she said, comes from the backup generators at the facilities, or from data centers that generate their own power.
The Trump administration recently encouraged data center companies to use backup generators more often and build their own power supply. For one Virginia data center, the on-site electricity production comes from large, gas turbines located near homes.
While the generators could relieve stress on the power grid or protect the facility during an outage, they could also degrade local air quality. A 2024 study suggested the total annual public health burden from U.S. data centers could reach $20 billion in 2028.
A billion dollars in tax revenue
At the beginning of the internet boom, Loudoun County was struggling financially, Rizer said.
The county got 80% of its tax revenues from residential properties. Then the 2008 financial crisis hit, which caused home values to plummet and county tax revenues to dip.
“It was a tough time,” Rizer said. “So I was brought in to try to grow that.”
Rizer decided then to court data center companies. It was the perfect location for the industry, he figured, because of the cheap land combined with a proximity to Washington D.C. and its fiber optic cable network that transmitted internet traffic across long distances.
Almost 20 years later, about 200 data centers cover the industrial side of Loudoun County. And more keep coming even though Rizer’s department stopped courting the industry in 2017 and the county passed laws restricting further development in 2021.
Loudoun County currently gets almost half of its tax revenue just from data centers, amounting to over a billion dollars, Rizer said. The county has been able to lower property tax rates while also building new parks, community centers, schools and roads.
“We’ve doubled the amount of services for our citizens over the last 10 years,” Rizer said.
Whether Delaware could experience a similar windfall is currently a source of debate.
Unlike Loudoun County, Delaware’s counties do not include computer equipment as part of their property tax assessments. Also the state is unlikely to ever host as many facilities as Virginia. Currently, there are five potential data center projects in New Castle County, compared to Loudoun’s 200 data centers.
Still, Rizer said the economic benefits of the industry go beyond the direct tax revenue.
Driving down the industrial corridor, he pointed to a commercial area with a row of about a dozen businesses. He said all of them are dedicated to servicing data centers, from repairing HVAC systems to painting the outside of buildings.
He also noted that data centers continuously upgrade equipment, which brings new jobs to the area. He said the industry could be a lifesaver to places that have seen stagnant economic growth in the past few years.
“If places aren’t growing, they’re dying,” Rizer said.
‘This place used to be beautiful’
When asked what he thought about the area’s data center growth, lifelong Loudoun County resident Michael Nash smiled sadly.
“This place used to be beautiful,” he said. “It was very peaceful. People used to come here to retire, so it’s very sad for me to see beautiful fields turn into boxes that look all the same.”
Data center growth has moved beyond Loudoun County’s industrial corridor into neighboring counties.
On a sunny Wednesday afternoon in nearby Fairfax County, three large data centers towered above a soccer field as youth soccer leagues practiced.
Dylan Southland, the director of the local soccer league using the field, said the dust and dirt from the recent construction “crushed them,” but the buildings are not bothering them now.
He said the construction company tried to prevent the dust from blowing into the soccer fields and committed $100,000 over two years to help fund the league.
Bolthouse of the Piedmont Environmental Council said the data centers next to the soccer fields are likely not in operation yet. They were only recently built, and there is a backlog of data centers waiting to join the grid in Virginia. But she said there is no way to know for sure.
Ashley Miller, one of the parents watching the soccer practice, said posts online about the lack of snow around the data centers make her worried about how the heat radiating off of the buildings affects the local environment.
A recent study that has not yet been peer-reviewed suggests that data centers create “heat islands” that could warm the land around them by up to 16 degrees Fahrenheit.
Jeremy, a Loudoun County resident who did not want to provide his last name, said he worried about their impact on energy bills. He said he’s seen his energy bill go up recently, and from what he has read, it’s going to get worse.
“It’s not looking great right now,” he said. “We are supposed to be getting some type of benefit from these tech companies having the data centers here, but I’m not sure what they are.”
Such concerns have sparked debates across Virginia.
Both Virginia and Delaware are part of the same regional electricity grid, which is run by PJM Interconnection, a private regulating entity that is overseen by federal energy officials. Energy prices across the region have gone up recently. Experts say the price spikes have been caused by too few new energy producers coming online while energy demand has skyrocketed — mainly from new data centers.
A 2024 Virginia report concluded that data centers had not increased residential power bills then, but only because the state previously had unused energy capacity, which is now running out.
Virginians could see a $168- to $444-yearly increase to their power bills as a direct result of data centers by 2040, according to the report.
Rizer said it is always tough to balance residents’ concerns with necessary economic growth.
“I’ve done almost $100 billion of businesses since I’ve been in Loudon, and the only thing common across all of them is someone’s been against every single one of the projects,” Rizer said. “That’s just the way it works.”
When asked about Delaware, he said data centers may or may not be the right type of business growth for the state. But, he said, residents should consider all of the benefits and downsides before making a decision.
“Everyone should have their opinions, and then a reasonable decision should be made that is in the best overall interest of the community,” Rizer said.
