3.5 GW and Counting
Northern Virginia — specifically Loudoun County and its epicentre in Ashburn — is the largest data centre market on earth. The region hosts over 3.5 GW of commissioned IT capacity across 300+ facilities, representing roughly 70% of global internet traffic exchange and generating $3.8 billion in annual tax revenue for Loudoun County alone.
Understanding this market is prerequisite knowledge for anyone operating in the data centre sector.
How Ashburn Became the Centre of the Internet
The story begins in the 1990s with MAE-East, one of the original Network Access Points (NAPs) where internet backbone providers interconnected. MFS Communications (later acquired by WorldCom, then Verizon) operated the exchange in Vienna, Virginia. The concentration of fibre and network operators drew AOL's headquarters to nearby Dulles, and the gravitational pull of interconnection density drew every subsequent operator to the same corridor.
By 2000, Equinix had opened its flagship Ashburn campus. Digital Realty (then GI Partners) followed. Amazon Web Services launched its first availability zone in Northern Virginia in 2006, effectively choosing Ashburn as the birthplace of commercial cloud computing. AWS US-East-1, hosted in the region, remains the largest cloud availability zone globally — a concentration so significant that AWS outages in the region have historically caused visible disruption across the internet.
Market by the Numbers (2026)
- -Total commissioned capacity:: 3.5+ GW
- -Under construction:: ~2.2 GW
- -Planned/permitted:: ~4 GW additional
- -Number of facilities:: 300+
- -Average colocation rate:: $130-165/kW/month
- -Power cost (Dominion Energy):: $0.055-0.070/kWh
- -Vacancy rate:: Below 2% for commissioned space
- -Major operators:: AWS, Microsoft, Google, Meta, Equinix, Digital Realty, QTS, CyrusOne (Brookfield), CloudHQ, STACK, Vantage, Compass
Power: The Binding Constraint
Dominion Energy serves the region through a network of substations connected to 500kV and 230kV transmission lines. The utility has invested over $4 billion in transmission upgrades since 2020, yet demand consistently outpaces supply.
**Current constraints:** - Interconnection queue for new data centre loads exceeds 15 GW — far beyond what can be built in the next decade - New interconnection requests face 3-5 year wait times for service - Dominion's most recent Integrated Resource Plan projects $12 billion in generation and transmission investment through 2030 - The utility has proposed surcharges specifically for data centre customers to fund grid expansion
**Power pricing trajectory:** - 2020: $0.045-0.055/kWh - 2024: $0.055-0.065/kWh - 2026: $0.060-0.070/kWh - Projected 2028: $0.070-0.085/kWh
The upward pricing trend reflects both infrastructure investment recovery and the sheer demand pressure on available generation.
Geographic Expansion
The original "Data Centre Alley" along the Route 28 corridor from Sterling to Ashburn is effectively built out. Expansion is proceeding in concentric rings:
**Prince William County:** The fastest-growing sub-market. QTS has a 1 GW+ campus under development. Multiple operators have secured large land parcels along the I-66 and Route 29 corridors. Lower land costs ($200-400K/acre versus $500K-1M+ in Loudoun) but longer fibre runs to Ashburn interconnection hubs.
**Fauquier and Culpeper Counties:** Rural counties west of Prince William with available land and power potential. Community opposition has been significant — Fauquier County enacted a data centre moratorium in 2024, later partially lifted.
**Henrico County (Richmond):** QTS's mega-campus development has positioned the Richmond market as a complement to Northern Virginia, with its own Dominion Energy substations and lower cost structure. The 100-mile fibre run to Ashburn adds 1-2ms of latency, acceptable for most workloads.
**Frederick County, Maryland:** Adjacent to Virginia with access to Potomac Edison (FirstEnergy) power, avoiding the Dominion queue. Several operators have secured permits for large-scale development.
Regulatory Environment
Loudoun County has historically been the most data-centre-friendly jurisdiction in the United States. The county's Computer Data Center Special Exception process provides a defined approval pathway, and the Board of Supervisors has consistently supported the industry.
However, the relationship is evolving: - **Tax revenue dependency:** Data centres generate ~30% of Loudoun County's property tax revenue, creating both political leverage and community resentment - **Noise ordinances:** Stricter enforcement of generator testing and cooling equipment noise limits - **Setback requirements:** Increased buffer zones between data centres and residential properties - **Green energy requirements:** Loudoun County has explored requiring renewable energy commitments as a condition of special exception approval
Prince William County adopted similar zoning provisions but with additional water usage restrictions that have slowed some approvals.
Connectivity Ecosystem
Northern Virginia's connectivity density is unmatched globally: - **Equinix Ashburn campus (DC1-DC15):** The single largest interconnection hub in the world. 1,600+ networks, 400+ cloud on-ramps. - **Digital Realty Ashburn:** Major carrier hotel with 200+ network providers - **CoreSite VA1-VA3:** Significant enterprise interconnection hub - **Internet Exchange Points:** LINX NoVA, DE-CIX New York (Ashburn PoP), Equinix IX - **Subsea cable connectivity:** Direct fibre routes to transatlantic submarine cable landing stations in New Jersey, providing sub-70ms latency to London
Investment Considerations
**For operators/developers:** - Land with secured power is the scarce asset — raw land without utility commitments has limited development value - Construction costs ($14-18M/MW) are among the highest nationally due to labour competition and permitting costs - Pre-leasing to hyperscalers before breaking ground is standard practice and often a financing requirement
**For investors:** - Cap rates for stabilised NoVA assets: 5.0-5.5% (the tightest of any US market) - Replacement cost provides a floor under valuations - Power constraint risk: facilities without long-term power commitments face potential stranding
Explore Northern Virginia facilities on our data centre directory or assess specific addresses using the Score Tool. For market entry strategy, contact our advisory team.