WASHINGTON — The Progressive Policy Institute (PPI) today released a new report warning that Virginia’s rigid energy mandates are colliding with surging electricity demand from the state’s booming data center industry, creating a policy-induced risk to affordability and grid reliability that could undermine public support for climate progress. As demand accelerates and reliability pressures mount, the report finds that inflexible, technology-specific mandates are increasingly disconnected from economic and system realities.
The report, titled “The Virginia Challenge: Meeting Energy Demand Affordably,” is the third in a PPI series examining how rigid climate mandates and prescriptive technology requirements can threaten affordability and reliability when real-world energy demand and grid constraints are treated as secondary concerns.
“Virginia’s emissions success came from a pragmatic strategy that prioritized reliable, clean power,” said Neel Brown, Managing Director at PPI. “But the state is now forcing the retirement of the very resources that made that progress possible — just as electricity demand is exploding. When policy ignores reliability and affordability, the result is higher costs, greater risk, and eroding public support.”
Authored by Brown and John Kemp, an internationally recognized energy markets expert, the report finds that Virginia’s strong emissions record largely predates the Virginia Clean Economy Act and reflects a successful shift from coal to natural gas and nuclear power. The report warns that today’s rigid mandates, enacted before the data center boom, now risk delivering diminishing climate returns while increasing costs and reliability risks for households and businesses.
Despite this strong baseline, the state’s current energy strategy is increasingly strained by skyrocketing demand, capacity concerns, and mounting wholesale costs. With reliability and affordability at stake, Virginia faces a critical opportunity to recalibrate its approach before inflexible mandates erode both climate progress and public support.
Key findings from the report include:
The authors argue that inflexible technology mandates and statutory retirement deadlines, combined with a failure to adapt to rising demand, have created a structural risk to Virginia’s power grid. When affordability and reliability are overlooked, consumer costs rise, and support for climate action falters. The report urges policymakers to pivot toward outcome-based energy policy, expand clean-firm capacity, and treat affordability as a core indicator of climate policy success.
PPI’s analysis offers a roadmap for recalibrating Virginia’s strategy, emphasizing flexibility, reliability, and fairness, to maintain progress toward decarbonization while safeguarding the Commonwealth’s energy future.
Read and download the report here.
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @ppi.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
