- Amazon is in the midst of $87 billion of data center development in Virginia.
- The company’s data centers in the state can consume about half the power of New York City.
- It’s the largest player in a fast-growing industry that could stress grids and speed the climate crisis.
Just a few miles from the $5 billion second headquarters that Amazon is raising outside of Washington DC, the tech giant is in the midst of a far larger, and less conspicuous, building boom.
The company is in the process of developing $87 billion worth of data centers, a push that has already made it the biggest player in the world’s largest data center market in northern Virginia. The featureless, warehouse-like structures are easy to miss on the sides of highways or tucked unassumingly amid suburban neighborhoods.
Data centers, including Amazon’s, play an increasingly central, but unseen role in modern life, housing the digital infrastructure that powers critical functions such as e-commerce, autonomous vehicles, video streaming, and, now, artificial intelligence.
There is a flipside, however, to their now ubiquitous presence in places like northern Virginia. The facilities consume quantities of power so vast that they have begun to tax entire energy grids and could exacerbate the climate crisis.
Amazon does not disclose how many data centers it occupies, where they are located, or how much electricity they consume. The company’s data facilities are tied to its large cloud computing business, Amazon Web Services, which offers software, storage, and other services to legions of customers.
Based on a review of permits that Insider obtained through a Freedom of Information Act request, Amazon operates, or is in the process of building or planning, 102 data centers in northern Virginia. Together, the facilities, when they are all up and running, will have emergency generators capable of producing more than 4.6 gigawatts of power. That’s almost enough backup electrical capacity to light up all of New York City on an average day.
In the data center industry, the installation of backup power is standard practice to guard against electrical interruptions and almost always exceeds the amount of electricity a facility actually consumes. Data centers generally use at least 60% of the power that a facility’s backup generator are capable of producing to leave room for redundnancy, according to Shaolei Ren, an electrical and computer engineering professor at UC Riverside who researches power use in data centers.
That would suggest that the power footprint for Amazon’s northern Virginia data center portfolio will amount to at least 2.7 gigawatts – 35% more than the entire power grid of the company’s hometown city of Seattle.
David Ward, an Amazon spokesman, declined to comment on Insider’s analysis of the company’s energy footprint in northern Virginia other than to say: “Your estimate is inaccurate.”
“All of a sudden, really for the first time in a generation, we’re starting to see load growth become a major concern,” said Abraham Silverman, a managing director at Columbia University’s Center on Global Energy Policy. “Data centers are coming in and driving hundreds and thousands of megawatts of new load.”
Many of Amazon’s data centers listed in the permits have been built recently and some may still be under construction. A small handful appear not to have yet broken ground, meaning it could take years for the facilities to ramp up their operations to the point where they are consuming power at close to capacity, experts say.
Data center developers and users often build spaces that are larger than they initially need, “with the expectation that they’re going to ramp to it over 10 years or so,” said Sean Brady, a managing director at Cushman & Wakefield who works within its global data-center advisory group.
There is other evidence that Amazon is not yet operating its portfolio at full throttle. Dominion Energy , the local utility in Virginia, disclosed that data centers there drew 2.8 gigawatts of electricity in 2022. The company doesn’t break out individual consumer demand, but Amazon likely was responsible only for a portion of that.
Why Virginia will need a power grid the size of France’s
Power providers, however, are already preparing for the daunting challenge of meeting the data center industry’s expanding needs. Their solutions could have major societal consequences.
PJM Interconnection, a regional transmission operator whose territory includes Virginia, forecast that the state may have to double the size of its grid in the next 15 years — growth that would put its electrical capacity on par with all of France. The growth will cost billions of dollars and could leave rate payers across the state with the tab.
To meet such an ambitious expansion, Dominion Energy recently proposed putting off the retirement of fossil-fuel-burning infrastructure, building new gas-fired power plants, and exiting the Regional Greenhouse Gas Initiative, an effort with 11 neighboring states to limit carbon emissions from power plants.
Virginia’s Republican governor, Glenn Youngkin, championed the plan, which will require approval from the State Corporation Commission, Virginia’s public-utilities regulator.
As data centers have expanded throughout the country and the power-hungry demands of artificial-intelligence software begin to be felt, energy experts have said that the efforts to cut carbon across more grids could be challenged.
Terry Boston, an energy executive who retired as the president and CEO of PJM in 2015, said that renewable energy often doesn’t match the prodigious, around-the-clock power needs of data centers.
“You cannot run a data center based on the variability of solar and wind,” Boston said. “There’s a lot being studied, but studies don’t keep the lights on.”
Boston added that utility providers facing major power increases from data-center development would be especially reluctant to retire fossil-fuel infrastructure until the reliability of renewables is more established or there is more battery storage capacity to create backup reservoirs of power.
“You don’t tear down your old barn until your new barn is built,” he said.
The reality of Amazon’s renewable energy claims
Amazon spent roughly $52 billion on data centers in Virginia between 2011 and 2021 and has proposed building an additional $35 billion of data facilities in the state by 2040 – a total of $87 billion of development.
As awareness about the escalating power needs of its data facilities has grown, the company has sought to deliver a reassuring message regarding its operations and ambitious plans for expansion. Its sustainability statements feature pictures of windmill-dotted sunflower fields and sheep grazing against rows of solar arrays. The company said last year that its data centers in northern Virginia now operate on 100% renewable power.
But there is a more nuanced — and far less green — reality to Amazon’s claim.
In Virginia, only 7% of the grid’s power currently comes from renewable energy, according to the state’s Department of Environmental Quality.
To secure clean power for its operations, Ward, the spokesman for Amazon, said the company currently sources about 1.7 gigawatts of renewable energy from solar and wind projects connected to the grid using what’s called power-purchase agreements. Amazon has plans to tap an additional 4.2 gigawatts this way. While this new green energy technically flows onto the grid and not directly to Amazon’s facilities, the purchase agreements allow the company to lay claim to it.
Amazon states that it also “may choose” other green power procurement methods, such as acquiring renewable energy certificates, known as RECs. Any producer of renewable energy can sell one REC for every megawatt hour of renewable energy it generates. Buyers are often corporate or government entities that need to show proof of renewable energy generation in order to meet compliance or voluntary sustainability targets.
Environmental groups and energy watchdogs have said that both approaches are laudable steps for corporate power consumers. But the strategies lose credibility, they warned, if the renewable power being procured doesn’t match the characteristics of the energy being consumed. Solar facilities – where Amazon gets the bulk of its renewable power on the PJM grid – can’t be counted as a solution, they say, for the power its data centers use at night, even though a power purchaser like Amazon can theoretically buy enough solar energy to compensate for its nighttime operations.
And some energy experts have raised particular concerns about RECs, which are sold on a opaque market.
“RECs have a mixed track record and they have certainly been misused and there has been greenwashing,” Ben Hertz-Shargel, an executive at the energy-research and consultancy firm Wood Mackenzie, said. “Retiring a REC from two states over from two years ago and calling it offsetting my power consumption from yesterday is not an accurate representation of sustainability.”
The Amazon spokesman declined to provide details about the company’s RECs purchases or how its solar energy might compensate for nighttime data center operations.
In comparison, Microsoft and Google, which both have sizable data-center portfolios, disclose basic details about their energy consumption that Amazon does not, including how much electricity their operations use each year and how they procure clean energy.
Apple goes further, documenting the power each of its data centers consumes.
Data-center operations are one of the largest areas of power consumption for big technology firms, making transparency around the sustainability of the energy used for these facilities key to evaluating their environmental track record.
The sharp contrast between Amazon’s claims and its lack of disclosures struck even Priya Barua, the director of market and policy innovation at the Clean Energy Buyers Association, an industry group whose membership includes Amazon and other large corporate purchasers of renewable power.
“If somebody is like, ‘We’ve met this huge goal and we have zero transparency around any of it,’ then I might question that a little bit,” Barua said.
Amazon’s permits provide a view into the size of its data center operations
Northern Virginia, now populated by a fast-growing constellation of big tech facilities, has long been a hub of the data-center business. The industry has thrived in this dense ecosystem of customers, service providers, and developers, tethered by a robust fiber-optic network that has long served federal government agencies. It is often said that about 70% of the world’s internet traffic flows through cabling and servers based in the area.
Amazon’s lack of transparency is not unusual in a business that prizes secrecy and security.
QTS, a data center developer and operator that was taken private by the investment firm Blackstone in 2021 in a $10 billion deal, discloses its portfolio’s electrical usage, but redacted its most recent greenhouse gas emissions from public view.
In Virginia, however, the industrial-scale backup-power systems that most data centers install on-site require air-quality permits to operate. The permits disclose how much power a facility’s backup generators can produce, which serves as a proxy for the power consumption of the facility itself.
The permits are not public, but after filing a Freedom of Information Act request with Virginia’s Department of Environmental Quality, Insider received copies of permits tied to Amazon’s data centers in northern Virginia.
Industry estimates vary on the relation between the power capacity of a data facility’s computer and cooling compared with its total backup generation.
Weston Swenson, the CEO of Novva, a West Coast data-center operator and developer, said that his facilities generally have twice the backup power of their server load, but noted that cooling systems add additional power consumption representing up to almost 70% of a facility’s backup generation.
Brady, the Cushman & Wakefield data center executive, said that data centers often match their backup generation to the capacity of a data center’s power supply. To build in a safety margin and not overload the grid or exceed the amount of backup generation, the facilities generally ramp their operations over time to no more than about 80% of their potential capacity. A 100 megawatt data center, therefore, would have 100 megawatts of backup power, but would limit its operations to about 80 megawatts.
Swenson and Brady said that they could not comment on Amazon specifically and that their calculations were meant to provide their own view on industry practices that could vary. By their formula, Amazon’s power usage could expand to more than three gigawatts within its present data center footprint– and potentially more as the company continues to scale its operations.
The data center industry has sought to portray itself as a clean energy champion
Amazon may be the colossus of the data-center market in northern Virginia, but a growing group of users and developers are clamoring for similar scale.
According to data from CBRE, there is 918 megawatts of data-center construction underway in northern Virginia and 3.9 gigawatts of planned projects ready to break ground — a record number.
PJM, the regional transmission operator that coordinates the flow of energy in Virginia, estimates that data centers could require an additional 7.5 gigawatts of energy over the next five years to operate in the state. A PJM forecast earlier this year said that in the next 15 years, Virginia may need to double the size of the state grid to 41 gigawatts, roughly the size of France’s grid. Most of that additional demand will come from data centers, the operator’s forecast said.
To accomplish that expansion, Dominion Energy has proposed a range of energy sources, including modular nuclear reactors and gas turbines. The Virginia Clean Economy Act, passed in 2020, mandates that Dominion produce 100% renewable energy by 2045. But the utility has said it may need to delay the installation of solar and wind projects that would be necessary to comply with that law so it can maintain system reliability and fulfill the soaring demand.
“A diverse resource mix will ensure that the company is able to meet the needs of customers,” the company’s plan says.
Despite its growing appetite for power and the delay that could pose to greening the grid, the data-center industry has insisted it is a champion of clean energy and has sought to challenge perceptions of its power use. Speaking in front of the state’s power regulator earlier this summer, a representative from the Data Center Coalition, an industry lobbying group, bristled at being labeled the culprit for the state’s skyrocketing power needs.
“We ask the commission not to lose sight of the energy, climate, and economic benefits unlocked by data centers,” Josh Levi, the president of the Data Center Coalition, told the regulator. “They are highly efficient facilities driving clean-energy development.”
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