Editorial: Southwest Virginia's unique pitch for data centers
The Roanoke Times
The most fascinating thing we’ve read lately isn’t on the New York Times best sellers list.
It’s a document that otherwise would cause eyes to glaze over — an economic development report on whether Southwest Virginia would be a good place to locate data centers, the massive warehouses of computer servers that make online traffic go.
Spoiler alert: The answer is yes, but the most remarkable part is how the report arrived at that conclusion.
The report — prepared by a consultant for the InvestSWVA economic development group under the code name “Project Oasis” — proposes that the coalfields tout their potential for renewable energy.
Yes, you read that right: A region historically known for fossil fuels is being urged to do a 180 and instead promote itself as a vast storehouse of renewable energy.
If you want more irony, the InvestSWVA group was created at the behest of the region’s Republican legislators. Whenever we write about the economy of Southwest Virginia, we often hear from certain readers who blame the region’s economic woes on Republican politicians clinging to coal long after it’s clear that coal is in decline. The economic problems confronting coal country are bigger than any one political party, though. Republicans as a whole may, indeed, be slow to recognize the market forces that are increasingly favoring renewables over coal (an irony in itself), but here are four Republicans from coal country who have set in motion a chain of events that have now led to a clarion call for the region to tout its renewable energy potential. Let’s give a little credit to Del. Terry Kilgore of Scott County, Del. Israel O’Quinn of Washington County, state Sen. Ben Chafin of Russell County and state Sen. Todd Pillion of Washington County, shall we?
The essence of this report goes like this: Data centers are energy hogs. That’s why data centers like renewable energy so much — it’s becoming cheaper than coal-fired electricity. Data centers also generate a lot of heat, so they require a lot of water for cooling — something on the order of 236,000 gallons per day. That’s where Southwest Virginia has a unique selling point. It’s sitting on top a lot of former coal mines that have been flooded. You can’t use that water for drinking, but you sure could use it for cooling.
The report identified at least six sites in Southwest Virginia that appear to meet the criteria necessary for data centers — lots of land, easy access to the power grid, broadband internet nearby. Three of those are outside coal country — in Carroll, Washington and Wythe counties. The other three are in coal country — Dickenson, Scott and Wise counties. Two of those sites, in Dickenson and Wise, are directly over top of mine pools. The third, in Scott, is a former limestone mine with a cavernous hall where the temperature is constantly 52 degrees and could potentially be developed in a way that provides natural cooling. That’s not unheard of — there’s already one site in Pennsylvania that uses an underground limestone mine for a data center. Think “computer cave.”
The report goes on to say that using mine water (or, in Scott, a dry mine) for cooling “could reduce the electricity required for cooling the data center by 90%” as well as eliminate the need for buying municipal water. The bottom line: “The annual savings would be over $1 million annually.” Would the prospect of shaving $1 million off the expense line be enough to lure data centers to the coalfields?
Some of the politicians who recently got briefed on the report via a Zoom call were downright ecstatic. Rep. Morgan Griffith, R-Salem, has toured that underground data center in Pennsylvania and sees the same potential here. Sen. Mark Warner, D-Virginia, who is now the vice chairman of the Senate Intelligence Committee (and would be chairman if Democrats win control of the Senate), voiced security concerns about having so many defense-related data centers near Washington. “Project Oasis could be the kind of calling card that I could take to the tech companies and the intel community,” he said.
Far Southwest Virginia already has three data centers — in Scott, Russell and Wise counties. That’s not much compared to Northern Virginia’s “Data Center Alley” which has at least 118 data centers in Loudoun and Fairfax counties alone, but it’s more than Roanoke, which just has one. In any case, it’s something to build on and represents a high-growth sector that Southwest Virginia is trying to latch onto. The number of jobs per data center are relatively small, about 40, but 40 jobs in a rural county mean a lot more than 40 jobs in Northern Virginia. These are also well-paid jobs — some salaries top out at $120,000 or more, or about four times the median household income in Dickenson County. No wonder that some counties in the region are now looking at setting a special low tax rate for property taxes on data centers. These are jobs the region could desperately use. This is a serious push, one that may take years to play out, but one that holds the potential to help reinvent the region’s economy.
It also requires the interest and cooperation of tech companies that — for all their talk about “innovation” and “disruption”— are often myopically focused on the places they know best. And that’s not the heart of Appalachia.
That’s why this is such a fascinating report. It’s in the form of a feasibility study but really offers a way to speak to two different audiences. First, it offers up talking points for a sales pitch to those tech companies — Southwest Virginia has some unique, environmentally friendly ways to help save you energy and cut costs. Second, it delivers a message to the region that it needs to present itself in a different way. The report says Southwest should consistently talk up the “region’s desire to transform itself from a coal producing area to an innovative renewable energy hub.” It’s unclear just how widespread that desire really is — this is not a part of the country where “the Green New Deal” is considered a good thing — but the desire for new jobs is certainly strong. That’s where data centers become an interesting place to start a different conversation. Data centers — lured by the promise of reduced cooling costs from water down in the mines but which would still demand lower-cost electricity — could jump-start the demand for renewable energy in a part of the country that has until now seen green energy as the enemy.
