AI Impact Series: Energy Needs vs the Environment

Welcome to part four of our AI Impact series. Need to catch up? Read parts one, two, and three.

Energy fuels the technology in our lives, especially the phones and internet we rely on. Data centers manage, process, and share all that data. Artificial intelligence (AI) changed everything in 2017, when data centers “started getting built with energy-intensive hardware designed for AI, which led them to double their electricity consumption by 2023.” As of this writing, 4.4% of all U.S. energy goes toward data centers.

Data centers were popular at first because of the tax revenue they generated. Henrico County incentivized their development in 2017 by lowering data center tax rates. Their proliferation in Virginia goes back decades, and now our state is the data center capital of the world.

More recently, tech billionaires driving data center proliferation crave infinite energy for reasons ranging from routine to bizarre, but their goals aren’t always compatible with those of everyday Virginians.

Virginia’s power grid is stretched to capacity, and that means we need more energy for the growing number of data centers. Big Tech, corporate, and government data crunching consumes the majority of the energy (think: Amazon tracking its shipments). To a lesser extent, we need energy to power the data centers that process data for our phones and the internet.

But the more energy we generate, the higher the risk to the environment. How can we best balance all these competing interests?

The environmental impacts of data centers

Data centers are specialized facilities with unique needs, and they have a known environmental cost. Such risks to our communities is a significant reason Virginians in Henrico County and beyond are pushing back against them. They harm the environment in multiple ways:

• air, water, and noise pollution
• carbon dioxide pollution
• damage to ecosystems (human, animal, plant, mineral)
• high resource demands (increasing and potentially unsustainable water and energy usage, land depletion)
• environmental injustice from data center concentration in low-income/historically marginalized communities
• health risks from Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS), a.k.a., “forever chemicals”

A related issue is pollution regulation and monitoring. Typically, this has been the role of the Environmental Protection Agency (EPA) and the Virginia Department of Environmental Quality, but with federal government cuts and rollback of regulations, will state and local air and water quality monitoring and reporting be sufficient?

Pollution concerns have been driving resistance to more data centers from multiple counties in central Virginia. N4C’s Data Centers page is a testament to this hot button issue. But the ones already built seem destined to stay, and because of advances in AI, they need more energy than usual.

Here’s the rub: to work properly, data centers need to operate 24/7, so intermittent wind and solar power may not be sufficient.

Our state’s data centers are in the coal-heavy grid region of the mid-Atlantic. Since most electrical grids rely on fossil fuels, there’s a climate cost attached to powering data centers.

Tech companies think more nuclear power is the answer to this fossil fuel problem. Per the article referenced earlier, Meta, Google, and Amazon want to triple global nuclear capacity by 2050 (it’s currently at 20%; over 50% of Virginia’s electricity is powered by natural gas). But nuclear power plants will take years to build.

To sum up, data centers need more energy than ever and come with a high environmental cost unless we can figure out a plan that balances protecting the environment with our energy needs.

Virginia energy needs vs. Big Tech energy needs

One main issue of the energy and environment dilemma is determining how much more energy we need going forward for our state, both regarding standard energy needs and data center needs. To illustrate, home energy use is dropping while Big Tech is siphoning energy from Virginia for AI uses and other projects, so why are our electric bills rising? All the while, we need to protect Virginia’s environment because once it’s destroyed, we can’t get it back.

Data center companies don’t seem concerned about the environmental impact of their facilities, especially in rural communities with undeveloped land. A recent study revealed they haven’t been fully transparent about why they’ve been targeting rural areas. They dangle the carrot of creating more jobs, but they’re really after “lower construction costs, abundant land… network connectivity and access to reliable, affordable electricity.”

This study revealed how little data center companies care about the communities they claim to be investing in. They’re targeting areas made vulnerable by sparser populations and shrinking tax bases (i.e., insufficient money to fund schools and other services/infrastructure). To such communities, data center tax revenue and job creation looks appealing, perhaps even a lifesaver.

Rural communities are also in a precarious position because they may lack experts who can effectively question the motives of data center companies as well as help the public become better informed about the issue.

The push by data center companies for affordable electricity means Virginia is caught between meeting their energy needs, the needs of Virginians (i.e., respecting our communities), avoiding more industrial burden on places like Eastern Henrico, preserving the character of rural communities, and protecting the environment.

Whether Virginia maximizes its current power sources or builds additional ones, some pose more risks to the environment than others. Another complicating factor is that our representatives don’t always seem to agree on which power source is best.

Where do our representatives stand?

During his last 2025 group media veil, Senator Mark Warner addressed data centers and their energy demands. He lamented the Trump administration cutting back on solar and wind energy. He thinks battery power and natural gas should be used to meet the state’s energy needs. Warner also wants nuclear energy to be an option:

I personally believe that means a fresh look at nuclear power as well. Small modular reactors could be the answer for a cluster of data centers where you don’t even need to hook into the grid where these data centers could actually be powered by SMRs. That’s green energy. It wouldn’t pass on the cost to consumers and might be part of the solution…I’m looking to make sure that consumers don’t get stuck with the power needs of these data centers that are part of the AI revolution.

At the state level, the Henrico County Delegation of the General Assembly discussed their “collaborative” approach to data centers and discussed Virginia’s energy needs during their January 5 town hall. Their goal is to have data centers “responsibly.”

Delegate Delores L. McQuinn proposed doing a town hall specifically on data centers so community members, data center companies, and representatives can have a productive dialogue about all aspects of the matter. She stressed being proactive about data centers rather than reactive.

During the town hall, Senator Schuyler VanValkenburg asked, “How do we handle electricity moving forward?” His legislative goals include building “more affordable energy.” That would mean increasing Virginia’s capacity to build solar energy, which would be cheaper and faster for ratepayers, as well as maximizing existing solar facilities.

VanValkenburg’s plan contrasts with Warner’s, who wants to consider SMR power plants that would be years in the making. As mentioned above, Big Tech wants to go all-in on nuclear power.

But SMRs are unproven technology that’s never been attempted in the United States. Nevertheless, “the world’s biggest tech companies have made it a top priority to harness ever more of that energy, aiming to reshape our energy grids in the process.” (via MIT Technology Review)

Another possible solution is “Making the electricity grid work like the internet” by treating electricity the way we treat data.

Protecting Virginia’s environment and the health of its residents would best be served by choosing the greenest energy sources possible and we now have more eyes on the problem than ever before. In the meantime, what can be done to minimize the negative impact of data centers on Virginia’s environment?

Could a data center crackdown be on the way?

Upwards of sixty bills to regulate data centers are making their way through the Virginia General Assembly. Collectively, these bills address transparency and accountability related to the issue of data center subsidies and tax revenue loss.

During the 2025 and 2026 sessions, State Senator Danica Roem led the charge on data center legislation.

She wants the state legislature to a) limit data center placement to industrial areas only, and b) remove the “sales tax exemption for data centers” in 2026. Roem anticipates obstacles to passing bills like hers:

“You’re going into the biggest of the big leagues here when you’re carrying legislation like this,” Roem continued, “because all the heavy hitters of corporate Virginia hate this bill, and so they don’t like it because it will limit their ability to make as much money as possible from sticking these things where they don’t belong.”

What can we do about AI’s environmental impact?

All the issues explored above raise the question of balance: how do Virginians balance technology needs vs. energy needs vs. environmental protection vs. affordability vs. jobs, and more. There’s no simple answer, but comprehensive solutions will certainly help.

Resolving these issues is going to require reflection, strategizing, hard work, collaboration, compromise, and time. Delegate McQuinn’s idea for a data center town hall would be a great way to start gaming out strategies.

But the AI factor and its overall impact on our lives raises the biggest question of all: can we opt out of AI, or is that option becoming increasingly impossible? And what will happen if we don’t?

In the next article, we’ll explore AI’s role in the global economy and how that’s impacting Virginia.