Axios Event: Rapidly increasing demand for energy in Virginia will be exacerbated by AI data centers

RICHMOND, VA. – Demand for energy in Virginia is growing at a rapid rate, and stakeholders across industry and government are trying to figure out how to meet this unprecedented increase that seems like it will only continue to grow.

Why it matters: Increased demand for energy will keep going up alongside a growing presence of AI data centers in the state.

• Axios 1 big thing host and editor Niala Boodhoo and Axios Richmond reporter Sabrina Moreno hosted conversations with Virginia Department of Energy director Glenn Davis, Virginia Commonwealth University associate professor Damian Pitt and director of the city of Richmond's office of sustainability Laura Thomas at the event, which was sponsored by Shell.

What they're saying: "Over the next decade, the governor's goal is to really bring about small modular reactors," Virginia Department of Energy director Glenn Davis said as he cited a focus on nuclear energy as a priority for the state as they figure out ways to meet increased demand.

• "We are seeing the largest growth demand in energy of any state in the nation. It was anticipated a few years ago our growth demand would be 1 to 2% year over year, now it's 5.6% year over year," Davis noted.

Data centers used to power AI are the "biggest opportunity" for Virginia from an economic standpoint, said Davis, referring to Virginia as "the data center capital of the world."

Maximizing energy efficiency and renewable energy use are potential solutions to meet increasing demand stemming from the growth of data centers, said Virginia Commonwealth University associate professor Damian Pitt.

• "Clearly, the growth of data centers is driving up demand for electricity. I think it's roughly 25% of electricity sales or consumption in Virginia now is from data centers, and that will presumably continue to rise as data centers continue to be built," Pitt said.
• "It's going to increase demand, so that puts all the more pressure on us to figure out ways to maximize energy efficiency, maximize distributed solar use, offshore wind, utility scale solar and all these different types of generation sources in order to be able to account for all of our demand, including data centers and electric vehicles," Pitt added.

What's next: Investments from the IRA will help Richmond transition to clean energy, said the director of the city's office of sustainability Laura Thomas. Thomas said her goal is to make the city of Richmond an example of how the IRA can "transform a community."

• "The city of Richmond is ready for these dollars. The city of Richmond is poised to transition and leapfrog to our clean energy future," Thomas said.
• The city is working to implement two Department of Energy grants toward community programs, and has plans to put the funds toward the creation of an "energy savings hub" to help residents see and understand energy savings programs available to them.

Content from sponsored segment below:

In a View From the Top conversation, Shell Energy president Glenn Wright called for increased investment in infrastructure to keep up with the steep increases in load growth in Virginia.

• "I think perhaps the biggest challenge that you face today in Virginia is that load growth is dramatic, it's increasing at more than 5% annually. That's a big deal because that means investment is required, and non-trivial investment. When I talk about investment, I mean investments in infrastructure like transmission and distribution and generation as well."