Proposed data center would dwarf electricity needs of Delaware households

Last month, Starwood Digital Ventures, a developer backed by a private-equity investment firm, submitted plans to New Castle County to build a 1.2-gigawatt data center on about 580 acres just north of the Delaware City Refinery. 

A data center that size would consume as much power as 875,000 to almost 1 million homes, according to estimates from experts in the field — nearly twice the 449,000 housing units that exist in Delaware.

The plan stretches over a 6 million-square-foot complex with 11 buildings. The two sections would be located north of Governor Lea Road and south of Hamburg Road, on either side of Red Lion Creek.

A private-equity-backed developer is seeking to build a massive data center just north of the Delaware City Refinery, bringing about 200 new jobs.. | MAP COURTESY OF GOOGLE / SPOTLIGHT DELAWARE GRAPHIC

Kevin Caneco, the New Castle County councilman in the district where the data center is planned, said he is concerned about its environmental impact and energy cost, but is not yet opposed to the project. 

“If I find out that this could be overly detrimental to the environment and to what we’re trying to do and costly, then I will oppose it,” Caneco said. “But right now, I’m just trying to keep my options open right now and listen to all the concerns I can hear.” 

No tenant has been publicly identified. Starwood Capital Group, the parent company of the applicant, declined to comment for this story, but said in county filings that this project would be a $10 billion investment in total.

The data center would span 11 buildings over hundreds of acres around Red Lion Creek. | PHOTO COURTESY OF NCC

Zoning laws, which govern how land can be used, permit data centers for the southern parcel of land but not the northern property. The New Castle County Council would have to rezone the land for the entirety of the project to be developed.

Delaware House Speaker Melissa Minor-Brown and State Sen. Nicole Poore, who represent the Delaware City area, will host a town hall meeting about the proposed data center at 5:30 p.m. July 24 at the Delaware City Hall. 

Minor-Brown said that while the state government does not have the power to approve or deny the project, she is hosting the public forum because she thinks it is “important for [residents] to have a seat at the table and voice concerns” about the project.

Minor-Brown said representatives from Starwood Capital Group plan to attend the meeting. 

Massive energy demand raises questions

Data centers are facilities that hold the computer server equipment needed to keep global internet services running. They’ve been around since the 1950s, but the U.S. is now seeing a boom of new construction because of artificial intelligence (AI) applications like ChatGPT, Google Gemini, Microsoft Copilot, and more.

Some of the wealthiest tech companies in the world are in the midst of a digital arms race to improve their AI applications and the work they can complete, ranging from writing a business memo to researching cancer treatments. In order to do that, however, they need more and bigger data centers.

But AI search uses almost 10 times more electricity than a typical internet search to compute. The growing demand for AI services have led to bigger, more energy-hungry data centers popping up  beyond Northern Virginia’s “Data Center Alley” and into states like Maryland and Pennsylvania. 

Delaware is part of the PJM grid, which has already seen increased electricity prices as the  development of new power plants continues to fall behind the increased demand for power in the region, in part from data centers. That led state legislators to have pitched debates this year over the development of an offshore wind farm, the potential for small-module nuclear reactors or even restarting a closed coal-fired plant. 

PJM did not respond to a request for comment on what impact the Delaware City data center would have on its grid and the rates paid by electric distributors.

Delaware as a whole consumes about 11.3 million megawatt hours of power a year, according to Delaware Department of Natural Resources and Environmental Control data. If the proposed data center is fully developed and were to run 24/7, it would consume about 8.7 million megawatt hours of power. Even at half power, it would consume more than a third of what the state uses overall.

Mark Scarano, the senior manager of economic development at Delmarva Power, the sole energy distributor for northern Delaware, said that he could not give any information about specific customers due to confidentiality concerns. 

But he said Delmarva does a feasibility study of all projects with high energy needs to see what improvements the grid would need to support the project and continue to deliver reliable energy to consumers.

“We wouldn’t have a project go on without looking at that larger picture of reliability. That’s something we take very seriously,” Scarano said.

He said he couldn’t comment on whether large data centers would raise consumer energy prices, which are determined through annual auctions by producers in a region.

David Tilley, associate professor of environmental science and technology at the University of Maryland, who has studied the energy use of data centers, said the proposed data center in New Castle County would require enough energy to power about 875,000 homes.

Alfonso Ortega, professor of energy technology at Villanova University, said he estimates the project will use enough energy to power 960,000 homes. 

Until Delaware has a plan for a long-term reliable source of energy, I’m not sure it’s a good idea to bring in an organization that is going to drain this much energy.

house speaker melissa minor-brown

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Water use raises environmental concerns

It could also use as much as 13 million gallons of water per day to cool its servers, Tilley said. Computer servers running 24/7 in a confined space run the risk of overheating, requiring developers to build complex air conditioning or water cooling systems. 

Where the proposed data center would draw its water is not yet clear. 

Minor-Brown said she is “not sure it makes sense” for this data center to be built when Delaware is already an energy importer. The First State relies on energy created in other states to power its homes and businesses because it has limited in-state generation. 

House Speaker Melissa Minor-Brown , right, said that she was uncertain whether Delaware should pursue the data center project in her district, especially as leaders still debate how to solve a lingering energy crisis. | SPOTLIGHT DELAWARE PHOTO BY JACOB OWENS

“Until Delaware has a plan for a long-term reliable source of energy, I’m not sure it’s a good idea to bring in an organization that is going to drain this much energy,” Minor-Brown said. 

Data centers have not yet had a direct impact on how much everyday consumers pay for electricity, Tilley said, but he thinks the massive growth in the field will start to impact people’s bills. 

“Now we’re at the point where it’s going to start affecting our electricity rates,” Tilley said.

Tilley, whose research has looked into the “huge” environmental footprint of these data centers, said there are ways to design them to make them more efficient, like using reclaimed water to cool the servers and reforesting areas near the complexes. 

“The industry is going to use what you give them, and they’re going to take as much as they can,” he said. “So it’s up to us, the public, to demand they do things the right way.”

The Delaware chapter of the Sierra Club has already lined up against the project. 

Dustyn Thompson, chapter director for Sierra Club Delaware, said he is worried there aren’t enough regulations in place to make sure data centers use clean energy and pay their fair share for the energy they use.

“This dynamic has never existed. We’ve never had energy users within a 500-acre footprint using twice as much power as all the homes in Delaware,” Thompson said. “That has never been a thing. So we don’t have the systems in place to be able to regulate and handle this.”

Thompson also said he fears the data center would take the millions of gallons of water it needs from Red Lion Creek, affecting the local ecosystem. 

When asked if the Sierra Club would pursue legal action against the project, Thompson said the organization is “exploring all possible pathways to ensure that this does not happen.”

Project would bring 225+ jobs

Michael Perlman, senior vice president of Starwood Capital Group, requested the data center join the county’s “Jobs Now” program, which offers “accelerated plan review for development projects that bring new or expanded employment opportunities.”

Each phase of the center would bring a minimum total of 95 to 120 operational full-time jobs, but there could be two to three times more than that depending on the tenant, Perlman wrote in a letter to the county.

The center would also need hundreds of construction workers during the building process.

Starwood submitted these proposed jobs for its initially project, which feature many starting salaries potentially starting in the six figures. | PHOTO COURTESY OF NCC

Kurt Foreman, the president and CEO of the Delaware Prosperity Partnership, the state’s public-private economic development organization, said he thinks the data center would bring “good jobs, but a modest number,” and that it would generate tax revenue for the state. 

Foreman didn’t explicitly support or criticize the project, saying it is up to the community to decide if it should move forward. But he said he is glad Starwood is considering building such a major project in Delaware. 

“We always like when people are giving Delaware a chance. We think we’re a great place to do business, and are always pleased when people at least review it and see if it makes sense for them,” Foreman said. 

“And then we get to do the same thing on our end. We get to, as a community, decide if it makes sense for us.”

In Perlman’s letter to the county, he said that, if approved, Starwood anticipates construction would begin in the summer of 2026 and the data center would begin operating in early 2028. 

The second phase, if pursued, would break ground in 2030 and go online in 2032.

Get Involved Attend the town hall meeting to learn about the proposed data center at 5:30 p.m. Thursday, July 24, at Delaware City Hall, located at 407 Clinton St. in Delaware City.