Data center load growth in Northern Virginia could drive the installation of up to 15GW of natural gas capacity across the PJM Interconnection grid by 2030, according to a new report from Aurora Energy Research.

The PJM market expects to add at least 11GW of new data center capacity by 2030 in the Northern Virginia market alone, which represents more than 40 percent of the state’s current peak demand.

This load growth will pose a serious challenge to PJM in ensuring that it can support the required generation and transmission capacity. Dominion Energy, the main utility serving the market, has said it has approximately 40GW of data center capacity in various stages of contracting as of December 2024, an 88 percent increase from July 2024.

“Adding the 10-15GW of firm generation capacity needed to supply these data centers and keep the lights on in Virginia will not be easy. It can take three to four years for the transmission organization just to greenlight a new generator, and market prices are currently too low for developers to build the kind of capacity required,” said Zachary Edelen, PJM research lead at Aurora Energy Research.

The report notes that while low-carbon energy will supply some of the energy needed, it is unlikely to meet it all, barring huge changes in incentives and regulations, which are not forthcoming.

As a result, Aurora contends that natural gas generation will make up the majority of new generation additions. “Our analyses consistently show that data centers bolster the business case for natural gas generators, meaning state and federal governments will need to do more if they want to decarbonize,” said Edelen.

Capacity rises are also expected to lead to fixed costs for reliability to rise significantly by the late 2020s. According to its research across the Mid-Atlantic, these costs could rise by more than 400 percent, which could lead to data centers beginning to “start locating elsewhere, following where electricity is cheaper,” said Edelen.

In addition, despite PJM’s projections, data center additions in the northern Virginia region could slow as other regions become more attractive. States such as Texas, Arizona, and North Carolina are competing with Virginia’s tax breaks with incentives of their own, and with increasing local opposition to new builds, there is a chance Virginia could begin to fall out of favor.

This, in turn, could mean less demand for new generators in the Mid-Atlantic. However, despite this, the report notes that gas generation will remain a key player, especially as coal plants continue to retire.

This is not the first report to warn of increased natural gas deployment to meet energy demands from the data center sector. A report by the Institute for Energy Economics and Financial Analysis, from earlier this year, found that utilities across Virginia, North Carolina, South Carolina, and Georgia planned to build more than 20GW of natural gas power plants by 2040 to meet demand from the data center sector.

https://www.datacenterdynamics.com/en/news/data-center-growth-in-virginia-could-spur-15gw-of-new-gas-generation-by-2030-report/