Environmental Cents (Redux): Data Center Power Costs
Meeting data centers' power needs will require significant new generating capacity, but what is the cost impact?
By Bruce Saller
COLUMNIST
Editor’s Note: Bruce Saller is on vacation. The Advance is going to be running some of his more-popular columns while he is away. This column originally ran August 1, 2025.
Dominion Energy estimates their peak load will double in the next fifteen years, mainly due to new data center demand. Meeting this need will require significant new generating capacity, but what is the cost impact?
The U.S. Energy Information Agency released a report in April 2025 which estimates the average cost of generation (in dollars per Giga-Watt Hour [one billion Watt-Hours]) coming online in 2030. The costs are provided with and without federal tax credits (TC). (Geothermal and Hydroelectric were removed since they are not feasible in our area.)
Dominion has varying loads depending on the season. YES Energy has charted Dominion’s average daily load for January and July:
According to Dominion Energy’s 2023 Integrated Resource Plan, Data Centers will consume an additional 70,000 GWH by 2038.
The addition of data centers will mainly cause the chart to shift higher with a slight increase in the peaks, as the power they consume only varies a few percent over the year.
Even though nuclear is the most expensive generation option, most of the cost is in construction, and once built its operating costs are lower than biomass, gas and offshore wind. So, utilities try to power most of their base load with nuclear and supplement it with other generation types.
Solar is a low-cost option to help with the summer peak, as panels generate the most energy in the afternoon when demand is peaking. Onshore wind is a low-cost option to help with the winter peaks as their output is highest in the winter months.
Solar and wind generation need to be supported by some battery storage, which increases their cost. However, the cost of Solar with Battery Storage is still about $30 less per GWH than nuclear.
The federal and Virginia governments are pushing for large amount of new advanced nuclear generating capacity to power the data centers and other new loads. We need to make sure data centers bear the costs of their power needs, so existing customers do not foot the bill.Sharing This Story Strengthens Your Community.
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