Can you remember anything from taking “Intro to Economics’’ when you were in college? I recall reading “The Wealth of Nations” by Adam Smith, the father of modern economics. One thing that stood out for me in this book was the mysterious concept of the invisible hand, which silently guides our individual business interests to create benefits for broader society.
Published in 1776, Smith’s “The Wealth of Nations” developed economic theories to describe what would become known as the Industrial Revolution. The era was defined by automation, manufacturing, and factories. Today, we are living in the Digital Revolution, which is underscored by computers, software, and networks—all of which live in a data center.
Data Center Alley
Virginia is the largest data center market in the world. In fact, Northern Virginia’s Loudoun County is home to the famed “Data Center Alley,” where you will find the highest concentration of the largest, most innovative data centers. Buddy Rizer, Executive Director of Economic Development in Loudoun County, has been called “The Godfather of Data Center Alley.” He anticipates Loudoun County will continue to be a global leader in data centers, particularly in response to the pandemic.
According to Rizer, “The importance of our data centers has never been more apparent than during the COVID-19 pandemic when the Internet and data centers became the vehicle through which we communicated with friends and family, did business and educated our children. Even in a time of unprecedented economic uncertainty for many businesses, the data centers are growing their footprint in Loudoun. We currently have about 18 million square feet of data center space on the ground with another 4 million or so under development with millions more square feet in the planning stages.”
Adam Smith applied economic theory to nations. In a similar way, is there a Virginia Data Center Economics in which an invisible hand guides these high-tech facilities to produce societal benefits for Virginia and the world? For answers, the NVTC commissioned an economic analysis by Fletcher Mangum, PhD, “The Impact of Data Centers on the State and Local Economies of Virginia.” This report is being used around the world to better understand the societal costs and benefits of data center economics. Based on the report and conversations with subject matter experts from NVTC’s Data Center and Cloud Committee, let’s look at four key metrics of data center economics: Innovation, Investment, Income, and Incentives.
Dense Fiber and Renewable Energy
Data center builders will joke that “a data center without fiber is just another building, but a data center without lots of power is going to be empty building!” Ample, high-capacity fiber combined with available, cost-effective power are critical elements to making Virginia a global data center leader. These elements are also catalysts for innovation.
Northern Virginia offers some of the densest fiber installations in the world. Virginia Beach in Eastern Virginia’s Hampton Roads area is the landing point for new subsea fiber cables connecting Virginia to Europe, South America and beyond. Vinay Nagpal, President of InterGlobix; Executive Director of the Internet Ecosystem Innovation Committee (IEIC); and Leadership Board Member of NVTC’s Data Center and Cloud Committee, has been at the forefront of establishing Virginia as a global fiber leader.
According to Nagpal, Northern Virginia is one of the most fiber-rich places in the world. “In Virginia you can access the latest in fiber technologies and connect to a dense interconnectivity ecosystem,” says Nagpal. “Northern Virginia has seen deployments of industry-leading cables with 6,912 fiber strands. These fiber cables are made up of fiber-optic strands, which are thinner than human hair and 1000 times stronger.”
In Virginia Beach, the MAREA subsea cable, owned by Facebook, Microsoft and Telxius, was the first subsea cable to land on the shores of Virginia from Spain. It was built in record time of under two years. It is 4,400 miles long, travels at depths of up to 17,000 feet, weighs 10 million pounds and boasts an industry-leading capacity of 240 terabits per second (Tbps) across eight fiber pairs. Nagpal explains: “To put it in perspective, every movie ever made on the planet can be transmitted across the Atlantic Ocean in 4K on the MAREA cable in 42 seconds.”
Significant innovation is also underway in Virginia’s data centers regarding power. The evolution of the data center industry over the past ten years has driven a huge increase in power consumption. While data centers are big power users, these facilities have become some of the most efficient power users in the world. The industry is keenly aware of its impact on the environment and has encouraged its utility partners to expand their renewable generation portfolios.
Dominion Energy has been a key partner in Virginia’s data center growth and move to renewable energy. Over the last six years, Dominion Energy has increased its renewable fleet from 41 megawatts to 2,600 megawatts of solar generation. Additionally, the company has committed to an additional 3,000 megawatts of solar generation in development or deployed in Virginia by 2022. The Commonwealth of Virginia is also driving the shift to renewable energy by passing the Virginia Clean Economy Act (VCEA) in 2020.
Stan Blackwell, Director of Customer Solutions and Strategic Partnerships at Dominion Energy and a Member of the Leadership Board of the NVTC Data Center and Cloud Committee, is a key ally of the data center industry.
Blackwell says, “Renewable energy development is a critical part of Dominion Energy’s bold plan to have net zero greenhouse gas emissions by 2050. As our customers, led by the data center industry, pursue renewables and carbon free energy, Dominion wants to be their partner and supplier.”