Many of the communities where we work, especially here in Northern Virginia, are facing big issues with electricity demands sparked by the AI-driven boom in data centers.  Northern Virginia is the world’s largest data center location, so the pressures here are especially intense.   What’s happening here offers many useful lessons—and warnings—for the rest of the US.   

If you’re looking to understand new directions for the data center sector, I recommend starting with the new study from our state’s Joint Legislative Audit and Review Commission.  The JLARC assessment offers a deep dive into the current and future states of the data center industry, and it’s a sobering read.  Today, data centers contribute around $9.1 billion to Virginia’s state GDP, and support around 74,000 jobs.  However, most of these jobs are linked to data center construction as the typical data center employs less than 50 people in its regular operations. Data centers are big revenue generators. Loudoun County VA, which is ground zero for data centers, gets 31% of its tax revenues from this source.

The report’s scary headlines relate to future demand, finding that meeting projected demand (and even half of this demand) will be nearly impossible.  As our local utilities strive to meet demand, impacts on typical utility customers will be significant.  JLARC estimates that residential customers could see monthly bills rise by between $14 and $37, with others costs also rising.  In addition, impacts on water resources and other inputs will also skyrocket.

The report concludes with some smart and doable recommendations for how to address these issues before they become unsustainable.  They are worth reading for non-Virginians who may just be beginning to deal with these challenges around data center development. 

Between 2004 and 2020, the World Bank produced the excellent Doing Business reports—an annual survey of the ease of doing business in more than 100 countries.  Doing Business generated lots of media buzz, but the series was stopped due to concerns about its methodologies and the fact that many countries were gaming the project’s metrics to perform better on various rankings.

As a result, the World Bank team went back to the lab and have now begun releasing the next generation of these assessments:  Business Ready. The first report release is very promising and worth the wait.  Business Ready 2024 assesses fifty economies, not yet including the US or members of the Organization for Economic Cooperation and Development (OECD), using 2,000 different data points in areas like openness to trade and investment, legal frameworks, public services, and many more.  For data geeks, the report includes extensive details on methodologies and even contains a “reproducibility package” to further test the data and assumptions.

The first releases are heavily focused on data and methodology, but some key findings do stand out.  When looking at business regulations, only 2/3 of assessed countries can be deemed “business ready,” and public service gaps are a major challenge in half of them.  Follow-on reports will be arriving in 2025 and 2026.  Watch this space for more details!