Virginia’s Data Center Hub Shifts as Power and Zoning Challenges Reshape Market Landscape

Market Leadership Shifts Within Virginia

Virginia remains the undisputed global leader in data center concentration, but the geographic distribution within the state is undergoing a dramatic transformation, according to a recent DCByte market analysis. The report indicates that Loudoun County, long the heart of Virginia’s “Data Center Alley,” has seen its market share plummet from 55% of statewide capacity in 2019 to just 26% in 2024.

Market Leadership Shifts Within Virginia
Power Constraints Reshape Development Patterns
Regulatory Changes Accelerate Market Redistribution
Emerging Jurisdictions Adopt Strategic Approaches
Strategic Planning Key to Sustainable Growth

Analysts suggest this redistribution stems from multiple factors including power capacity limitations, evolving zoning regulations, and increasing community pushback against data center sprawl. Despite Loudoun’s declining percentage, Virginia’s overall data center capacity has grown substantially, from approximately 5.2GW in 2019 to nearly 40GW in 2024.

Power Constraints Reshape Development Patterns

The shift away from Loudoun County comes as power demand significantly outpaces supply across Virginia, according to industry reports. Dominion Energy, the state’s primary electrical utility, has seen its contracted data center power capacity nearly double within just six months, driven largely by heavy data center users.

Robert Blue, CEO of Dominion Energy, reportedly confirmed that data centers are a primary driver of the state’s escalating power demands. The company has reaffirmed its commitment to building new power generation infrastructure and has proposed a new rate class specifically for large-scale data center customers consuming more than 25MW with high monthly load factors.

Regulatory Changes Accelerate Market Redistribution

Sources indicate that zoning regulations have played a crucial role in redirecting data center development. In early 2025, Loudoun County joined other Virginia jurisdictions in passing legislation that eliminated by-right development for data centers, requiring additional approval steps including legislative review and public hearings.

This regulatory shift has created opportunities for other counties to position themselves as attractive alternatives for data center investment. According to the analysis, Culpeper and Prince William counties have emerged as primary beneficiaries of this geographic redistribution.

Emerging Jurisdictions Adopt Strategic Approaches

County officials in emerging data center markets are reportedly taking community concerns more seriously while accommodating growth. Culpeper County recently established the Culpeper Technology Zone, a 690-acre designated area that concentrates all data center development in one location to utilize existing power infrastructure and minimize sprawl-related controversies.

Prince William County has implemented a “Data Center Opportunity Zone Overlay District” to manage construction, though some of its largest projects face legal challenges. The county is reportedly considering whether to eliminate the zone altogether amid ongoing litigation surrounding the Devlin Technology Park and Prince William Digital Gateway developments.

Strategic Planning Key to Sustainable Growth

Colby Cox, managing director for the Americas at DCByte, suggested that “strategic planning and clear local frameworks can unlock long-term potential” for Virginia’s data center market. Analysts indicate that the current transition demonstrates the market’s ability to continue expanding while addressing community and power concerns through thoughtful jurisdiction-level planning.

Despite the geographic redistribution within Virginia, the state maintains its position as the world’s leading data center hub, with the Northern Virginia region reportedly processing approximately 70% of global internet traffic. The evolution of development patterns suggests a more distributed future for this critical infrastructure sector while maintaining Virginia’s dominant global position.