Wise County, Virginia: A Data Center Location of Choice

Overview

Southwest Virginia, a region once defined by its mass coal production, seeks to rebuild and diversify its economy by employing innovative approaches that leverage the unique qualities of the region. One such regional characteristic that gives way for opportunity is the presence of vast pools of underground mine water that offer immense potential for geothermal cooling technologies. Project Oasis, an extensive feasibility study commissioned by InvestSWVA, further explored this potential and concluded the region, and specifically Wise County, to be an ideal location for hyperscale data centers looking to meet significant sustainability goals by utilizing renewable energy sources. 

Project Oasis’ key findings illustrate Wise County’s suitability for data center development. 

Geothermal Cooling & Site Availability

Project Oasis identified two sites that can both meet the general criteria to host a 36 MW hyperscale data center and that have potential to take advantage of mine water cooling capabilities. The Lonesome Pine Regional Business & Technology Park in Wise County offers:

• Utilization of 51-degree water from the Upper Banner Mine site for cost-effective geothermal cooling options, creating an estimated $1 million in municipal water and energy savings annually
• 388 acres of land
• Solar development potential
• Reliable electric power. 10 MW can be provided quickly, with construction of 69 kV transmission facilities to Old Dominion Power owned substation site to support up to 36 MW possible
• Triple redundant broadband connection available on site. Providers include Point Broadband, Scott County Telephone, and Verizon. 
• Site readiness. Currently at a VEDP Tier 2 level. Due diligence required to advance to a Tier 4 is currently in process in conjunction with a comprehensive Master Plan update. 

Workforce

• Wages for specialty positions (i.e. network architects) are 17% less in the region than the national average
• Strong IT training programs and resources exist with the region’s community colleges and at University of Virginia’s College at Wise
• There is a reasonable pool of workers in the region that possess the skills and training that can be transferrable to a data center environment
• Some key positions would likely need to be sourced from outside the region

Low Disaster Risk and Diverse Geography

• Region provides a low-risk option from natural and man-made disasters
• Region meets distance requirements for disaster recovery and back up from primary data center locations such as Ashburn, Richmond, and Boydton, VA (Microsoft)
• Diverse geography and workforce capable of maintaining and manning a backup site through future public health or other crises
• Electric transmission network that supplies the region has three transmission providers and is electrically diverse from data center hubs in Northern Virginia, Richmond, and North Carolina

Local and State Incentives

• A regionally approved data center equipment tax rate of 0.24/$100, and a favorable depreciation schedule of 50/35/20/10/5%. This is the Commonwealth of Virginia’s lowest regional tax rate of its kind
• Private investment incentives and special tax breaks available for developments in the region’s Opportunity and Enterprise Zones
• Commonwealth Opportunity Fund and Tobacco Region Opportunity Fund provide performance-based grants and loans to support site development, access roads, and infrastructure expansion
• Numerous funding opportunities to support new worker training

Economic Impact

The economic and fiscal impact analysis that was conducted for Project Oasis estimated that a large data center locating in the region would result in:

• Over 2,000 construction jobs
• 40 direct and 59 indirect permanent jobs
• $233 Million in economic activity during construction
• Over $50 Million in annual economic activity when operational

On Point Development Strategies LLC, R Kent Hill, “Project Oasis: Market Analysis for Data Center Investment in Southwest Virginia,” September, 2020.