Datacenter Energy Demand In Bitbarn 'capital Of The World' Virginia Nearly Doubled In Second Half Of 2024

Demand for electricity from datacenters in Virginia nearly doubled in the second half of 2024, power supplier Dominion Energy said of the region, which is home to "Datacenter Alley".

"We now have approximately 40 gigawatts in various stages of contracting as of December 2024, which compares to around 21 gigawatts as of July 2024, an increase of 19 gigawatts or 88 percent," CEO Robert Blue said during his company's Q4 earnings call with Wall Street on Wednesday.

Virginia has the largest concentration of datacenters in the world, and amid the AI boom, the market is only getting hotter. According to Blue, since Dominion began tracking, the utility has connected roughly 450 datacenters totaling nearly 9 gigawatts of capacity. Bit barns are such big business for Dominion that they now account for more than a quarter of its sales in Virginia.

Looking ahead, Blue expects demand from datacenters in the region to continue to grow. "What's undeniable is that datacenter growth in Virginia is not slowing down. In fact, it's accelerating," he said.

The company is reportedly tracking more than 26 gigawatts of expected datacenter demand, along with another 5 gigawatts of datacenter capacity from companies that have signed contracts to begin deploying the necessary distribution and substation equipment to support them.

To support this demand, Blue highlighted several ongoing projects and upgrades in the region including the construction of a 500 kilovolt transmission line expected to come online later this year. Dominion has also received SEC approval for a second high-voltage transmission line over the same capacity, which Blue expects to come online by the end of 2027.

Blue also provided an update on the Coastal Virginia Offshore Wind project which will eventually supply 2.6 gigawatts of power. That's enough to power 660,000 homes — or one really, really big GPU bit barn assuming a steady breeze. The project is now 50 percent complete and is expected to come online sometime next year.

In total, Dominion CFO Steven Ridge is now forecasting capital expenditures of roughly $50 billion over the next five years, with 80 percent of that spend centered in Virginia.

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Datacenter power consumption has become an increasing point of concern, as model builders, cloud providers, and hyperscalers look to build ever larger clusters of GPUs and other accelerators necessary to support next-gen AI models.

Earlier this month, Goldman Sachs issued a stark warning, predicting that datacenter energy consumption would more than double by the end of the decade. And due to the grid upgrades necessary to support this demand, Goldman Sachs anticipates there could be a supply crunch in many markets.

With that said, there are some hopes that efficiency gains demonstrated with the training of recent AI models, like DeepSeek V3 and R1, could help to curb the energy demands associated with AI training. ®