Marty Gordon
NRVsports@ourvalley.org
As the calendar turns to 2026, there is a growing conversation over data centers and where they can be located.
None have probed the New River Valley for a possible location, but one was recently announced for nearby Wythe County.
Data centers are a physical facility containing servers, storage and networking equipment used to house, process and distribute digital information.
There are four main types: Enterprise (owned by the company using it), Colocation (renting space to multiple customers, Cloud (operated by other providers) and Managed Services (third-parties).
The Montgomery County Board of Supervisors have requested its planning commission and staff to study current land uses and recommend appropriate changes to the county’s zoning ordinance to possibly deal with any future data center requests.
Virginia as a whole has become a major player in the location of data centers. Key requirements for data centers include access to power and large, flat areas of land.
In theory, data centers can be built almost anywhere. This has been true for Virginia as the “Data Center Alley” in Northern Virginia being the world’s largest market, handling close to 70 percent of the globe’s internet traffic.
This has included huge increases in power demand, mainly being driven by AI. On the flip side, it also includes billions of dollars in tax revenue for local governments.
In short, Virginia is the world leader for data centers, but faces significant challenges in managing its rapid, intensive growth.
Two years ago, the state’s Joint Legislative Audit and Review Commission (JLAR) directed staff to review the impacts of the data center industry in Virginia.
The study shows the data center industry is estimated to contribute 74,000 jobs, $5.5 billion in labor income and $9.1 billion to the overall Virginia economy on an annual basis.
The numbers continued to show that localities in economically distressed areas the state could benefit from data centers thanks to tax revenue.
But opponents have raised concerns over noise, water usage and the possible strain on the local electric grid.
The JLARC study said yes, modern data centers consume substantially more energy than any other industrial operations.
Modern data centers consume substantially more energy than other types of commercial or industrial operations. Consequently, the data center industry boom in Virginia has substantially driven up energy demand in the state, and demand is forecast to continue growing for the foreseeable future.
The state’s energy demand was essentially flat from 2006 to 2020 because, even though population increased, it was offset by energy efficiency improvements. However, an independent forecast commissioned by JLARC shows that unconstrained demand for power in Virginia would double within the next 10 years, with the data center industry being the main driver.
An independent model of the energy grid commissioned by JLARC staff found that a substantial amount of new power generation and transmission infrastructure will be needed in Virginia to meet unconstrained energy demand or even half of unconstrained demand.
The study shows data centers do provide positive economic benefits to Virginia’s economy, mostly during their initial construction
“Data centers provide positive benefits to Virginia’s economy mostly because of the industry’s substantial capital investment. The primary benefit comes from the initial construction of data centers. Most construction spending likely remains in the state economy because much of it goes to Virginia-based businesses providing construction materials and services.”
But the study said data center industry presents additional financial risks to electric utilities and their customers because of the sheer size of the industry’s energy demand.
Also, on the cooling side, data centers require industrial-scale type cooling to manage the heat generated by the computing equipment.
The JLARC study showed most data centers use about the same amount of water or less as an average large office building, although a few require substantially more, and some require less than a typical household. The amount of water a data center uses depends on its size, computing density, and type of cooling system.
JLARC says three Virginia localities with the largest data center markets have taken or are considering changes to zoning ordinances to better manage future data center development, and several localities considering their first data center projects are proactively implementing planning and zoning changes to promote appropriate industry development.
This is why Montgomery County leaders are looking to the future and possible changes ot its zoning.
Again, no new data center has expressed plans to locate in Montgomery County, but a smaller does currently exist in the Virginia Tech Corporate Research Center (Brush Mountain facility), which is owned by Advanced Logic Industries.
Online the company describes itself as offering the security, convenience and amenities of a hybrid cloud data center; staffed with technical expertise in partnership with our parent company, Advanced Logic Industries (ALI). ALI has been delivering IT services throughout the mid-Atlantic since 1991.
