5 common questions about data center developments

Virginia is home to about 150 data centers — or 35% of all known hyperscale data centers globally — making it the largest data center market in the world.

But most of the state’s data centers are in Northern Virginia, meaning that these types of developments are unfamiliar to many Southside residents.

So when a massive data center project was proposed earlier this year for Pittsylvania County, residents had questions. Currently, a Microsoft data center in Mecklenburg County and a Lumos data center in Lynchburg are the closest such developments to Pittsylvania County.

Pittsylvania supervisors last week approved the plans , even after some county residents voiced concerns at public meetings about about noise pollution, traffic, environmental impacts and the reality of advertised economic benefits.

Their worries echoed those raised by some Northern Virginians who have also been pushing to keep data centers out of their communities. An application for a proposed data center in Catlett, a village in Fauquier County, was withdrawn in June after facing community opposition.

Here are some of the frequently asked questions about data center projects, which a number of Southwest and Southside localities would like to attract .

What are data centers?

Data centers are large warehouse-like buildings that house computer and networking equipment. They have physical locations where data is stored and sent, usually on a large scale for businesses, military and governments.

There are two main types of data centers: owner-occupied and colocation. Owner-occupied data centers are run by companies for their own purposes, like the Microsoft campus in Mecklenburg County. Colocation data centers — sometimes called multitenant — lease equipment, space and bandwidth out to customers.

What kinds of jobs and economic benefits do data centers provide?

Because they are highly capital-intensive, data centers actually require relatively few workers compared to other businesses, according to an article by economist John Mullin for the Federal Reserve Bank of Richmond.

“In 2021, for example, Virginia data centers directly employed only 5,500 workers in their operations — a figure scarcely greater than 0.1% of the state’s workforce of more than 4 million people,” according to Mullin.

The flipside of this is that the jobs that data centers do create tend to pay well because of the elevated skill set they require, Mullin said.

The proposed data center in Pittsylvania County could create up to 500 high-wage jobs, said Thomas Gallagher, a representative of developer Anchorstone Advisors SOVA LLC. These jobs are mostly technical workers, or people who build and repair the servers, Gallagher said.

But the number has not been finalized, according to Matt Rowe, economic development director for the county.

Data center projects also create a lot of construction jobs, according to Mullin.

“In 2021, there were almost twice as many people employed [statewide] in the construction of new data centers as in operations of preexisting centers,” he wrote.

Another economic benefit of data centers is tax revenue. In Pittsylvania County, data center equipment is taxed at a higher rate than real estate or other personal property, Gallagher said.

“Because data centers require more equipment and utilities than they need employees, data centers provide a staggering amount of property tax revenue for local governments,” according to a 2024 economic impact study of data centers in Virginia by the Northern Virginia Technology Council.

The study found that data centers in Virginia paid an estimated minimum of $640 million in taxes to the state in 2022, even after considering the state’s sales and use tax exemption for large data centers. And this figure is almost certainly an underestimate, the report says.

The proposed Pittsylvania County project could contribute up to $120 million in tax revenue over a 10- to 15-year period, according to Gallagher — though Rowe cautioned that it’s too early to say for sure.

How do data centers affect the environment?

This year, the Virginia Department of Environmental Quality proposed a $42,000 fine for the Microsoft data center in Mecklenburg County after the development caused some negative environmental impacts to surrounding wetlands, including discharges of sediment pollutants.

But data centers are not unique in this way, said Irina Calos, spokesperson for the DEQ.

“Any development could impact our environment if a developer does not adhere to applicable environmental laws, regulations, and best practices,” Calos said in an email. “DEQ’s robust permitting, compliance, and enforcement programs ensure that developers are aware of the requirement to abide by all applicable laws, regulations, and agreements, and the consequences for not adhering to them.”

Water consumption and greenhouse gas production are the two main environmental impacts of data centers, said Landon Marston, a Virginia Tech professor who has researched the issue.

“But to be clear, those greenhouse gas emissions are not directly at the data center itself,” Marston said.

Instead, they’re from the power plants that generate the electricity for the data centers — plants that in Virginia primarily rely on natural gas and coal.

“The same energy source powering your home and your business, those are the same power sources that these data centers are pulling on,” he said. “The difference is that they use a lot more energy.”

If you were to trace the greenhouse gas emissions at power plants, you’d find that the data centers consuming these large quantities of electricity are responsible for a substantial amount of emissions, he said.

“But as far as direct greenhouse gas emissions, produced at the facility itself, it’s negligible,” Marston said.

Data centers do have direct water consumption, though, usually for cooling purposes.

“A quarter to a third of the total water that can be attributed to a data center is directly within the data center itself, primarily due to cooling,” he said.

Some data centers use waterless cooling with other equipment like fans, “which obviously doesn’t require as much water, but then there are tradeoffs because it ends up consuming a lot more energy.”

Data centers usually get this water from the locality in which they’re located, which relates to another resident concern: utility usage.

What kinds of utilities do data centers require?

Data centers require electricity, water and industrial-scale fiber to carry the data that they store.

They require a massive amount of energy to operate — according to a recent segment by PBS NewsHour, data centers use between 2% and 8% of the world’s energy. And according to a recent Washington Post article , parts of the United States are running out of power, partially because of data center usage.

“Northern Virginia needs the equivalent of several large nuclear power plants to serve all the new data centers planned and under construction,” the article said.

The developers for the Pittsylvania project say that the necessary power infrastructure is in place at the proposed location off of U.S. 58. in Ringgold, in the southeastern part of the county just a few miles outside Danville. And Gallagher said that the project won’t cause power-supply problems for nearby residents.

Electricity generation is the second-largest water consumer in the country, making water a crucial utility for data centers, too, according to Marston.

Some businesses will pull water straight from a river or aquifer if they aren’t concerned about the quality, Marston said. But untreated water can clog data center cooling apparatuses with scale, or a chalk-like buildup, so these developments use cleaner water.

“Generally, [data centers] just purchase water from a local utility, much like a business would,” Martson said. “But depending on the size of the data center, it might use a significant amount of water. In some cases … they end up constituting a fairly sizable portion of the overall water demand.”

Especially in smaller or more rural areas, data centers can end up using a large amount of water relative to the locality’s total distribution, sometimes pushing the infrastructure near capacity.

“It may even exceed the capacity of the current utility, and that might cause the need for expansion, which is very, very costly,” Martson said.

A large data center could use anywhere between 1 million and 5 million gallons of water a day, or as much as a town of 10,000 to 50,000 people, according to a 2023 Washington Post article .

A potential way to alleviate the issue of water strain in communities near data centers is to invest in solar and wind energy, which use significantly less water than other forms of electricity generation, according to Marston.

Gallagher said that it makes sense for the Pittsylvania data center project to take advantage of nearby solar projects for power generation, though it’s unlikely that they’ll put solar panels on the rooftop.

The water and power infrastructure is in place at the parcel in Ringgold, according to Gallagher, which is one reason why this location was chosen.

Developers and localities will investigate existing infrastructure when considering a data center project, Martson said.

“I would suspect that they’ve done their due diligence, especially with respect to power because that’s such a critical input for their processes,” he said.

Many Southside and Southwest communities have been hoping to attract data center developments, which means these localities have likely worked to make sure they can support those types of projects, Marston said.

How much noise do data centers make?

The developers for the proposed Pittsylvania County project have consistently heard concerns about noise level, Gallagher said.

Residents near “Data Center Alley,” a nickname for the part of Loudoun County that is home to the world’s largest concentration of data centers, say that there’s a constant “eerie hum” coming from the data centers, according to a Business Insider article .

Data center noise comes from several places: the hum of the servers, the whirring of cooling fans and the continuous work of the HVAC system, according to an article by C&C Technology Group, a technology advisory company.

The developers for the Pittsylvania project said they will comply with the county’s noise ordinance and adhere to a 65 decibel limit at the parcel’s property line.

A normal conversation is between 60 and 70 decibels, according to a chart by Yale Environmental Health and Safety.

The chart says that 65 decibels is about the same level of noise as a business office. This is quieter than a vacuum cleaner, which is 75 decibels, but louder than a household refrigerator hum, which is 55 decibels.

“If you were at the property line and you could hear something as loud as a lawnmower, that would be out of compliance,” Gallagher said.

Annual testing would ensure that the data center was complying with this limit, he said.

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