On January 17, 2025, Virginia Department of Environmental Quality (DEQ) issued three (3) clarification guidance documents addressing key questions related to minor New Source Review (mNSR) air permitting for datacenters. These updates provide necessary information for facilities planning to build or expand datacenters in Virginia.
These guidance documents address the differences between the definition of “emergency” in federal regulations and Virginia as well as DEQ’s interpretation of single source determination, project aggregation, and expectation of emissions guarantees. Moreover, DEQ provided guidance on allowable construction activities that can proceed prior to receiving a final air permit under Article 6. This article summarizes the key points from the guidance documents, helping your facility understand the implications and better plan for future projects.
Virginia’s definition of “emergency” and federal’s definition are different
In a guidance document titled Clarification 2025-01, DEQ outlined the distinction between state and federal definitions of “emergency” use.
- Under the federal definition, there is no operating hour limitation during emergency scenarios. However, an emergency engine is only allowed to operate for up to 100 hours annually for maintenance and testing, out of which up to 50 hours could be used for non-emergency uses such as demand response/peak shaving.
- Under Virginia definition, total operating hours are capped at 500 per year, including emergencies, maintenance, testing, and demand response scenarios. Furthermore, the state does not allow any hours for non-emergency purposes beyond the essential maintenance and readiness testing.
This distinction is crucial for datacenters and any facility using emergency engines, as Virginia’s definition is more restrictive than federal regulations. For datacenters, this distinction essentially means that if a facility wants to utilize the 50 hour per year of non-emergency operation which is allowed under federal regulations, the participating engines will be considered non-emergency for air permitting in Virginia and more restrictive state Best Available Control Technology (state BACT) requirement would apply to them.
Data Centers: Special Considerations for Air Permitting
In another guidance document titled Clarification 2025-02, DEQ provided insights into their expectations for emissions guarantees, source aggregation, project aggregation, and expected operating hours from datacenters.
In this guidance document, DEQ clarified that the base expectation for emergency diesel engines in Virginia is that they would meet Tier II emissions standards (i.e., 6.0 g/bhp-hr for nitrogen oxides (NOX)). DEQ also recommends facilities to evaluate options for using natural gas instead of diesel since natural gas fired engines generate lower NOX emissions. Given most datacenters are designed and operated in an “n+1” or “n+2” redundancy mode, DEQ generally anticipates that “n” engines to be Tier IV generators (or Tier II with Selective Catalytic Reduction (SCR)) permitted to operate outside of emergencies, and the “+1” and “+2” units being Tier II emergency-only generators.
DEQ also clarified that they will rely on the 2019 U.S. EPA Idsall memo that addresses “common sense notion of a plant” to determine adjacency when evaluating whether multiple data center facilities (DCFs) located in close proximity to one another should be considered a single stationary source. One of the key clarifications in this document is that DEQ would presume the pattern of development constitutes separate station sources if DCFs have boundaries more than 0.25 miles from each other. The guidance document also states that the DEQ will make case-by-case determinations for each proposed project involving multiple DCFs within 0.125 to 0.25 miles of each other. DCFs with the same owner/operator at a distance of less than 0.125 miles based on property boundaries will be considered adjacent. DEQ also clarifies that it does not intend to reevaluate previous determination based on this new guidance, however, if the circumstances of the permit change, a reevaluation will be considered.
DEQ also acknowledges that data center developments are often built in phases. However, they clarified that pursuant to 9VAC5-80-1100.E., when construction occurs in incremental stages within a five-year period, DEQ may aggregate these phases to determine mNSR applicability under Article 6 and state BACT requirements. While mNSR (Article 6) uses a five-year window for project aggregation, there is no established timeframe for project aggregation under major NSR (Article 8 for Prevention of Significant Deterioration (PSD) or Article 9 for Nonattainment New Source Review (NANSR)), meaning data centers must carefully manage their permitted emissions to avoid exceeding the 100 tons/year threshold in Northern Virginia at any stage of development.
DEQ also clarified that minor NSR permits remain valid only if a continuous program of construction begins within 18 months of issuance and a program of construction is not discontinued for a period of 18 months or more. Facilities can request extension prior to the expiration date of the initial approval. DEQ expects that a request for extension is accompanied by an analysis that demonstrates previous BACT analysis is still appropriate.
DEQ clarified its interest in minimizing maintenance/readiness testing operations to the extent possible since the emissions from such operations represent the vast majority of actual emissions from datacenters. DEQ expects that applicants submit a maintenance and readiness testing schedule with the air permit application which would be incorporated into the permit.
DEQ additionally noted that for facilities storing diesel, 9VAC25-580 requires registration of Underground Storage Tanks (USTs) with DEQ to ensure proper installation, operation, and maintenance of the tank and piping systems to prevent and detect releases. If the facility uses Aboveground Storage Tank (AST) with a capacity of more than 660 gallons, it must meet the technical requirements of 9VAC25-91 and be registered with DEQ. Moreover, submission of an Oil Discharge Contingency Plan (ODCP) for facilities storing 25,000 gallons or more is required. It should be noted that although small ASTs (below 660 gallons) are exempt from the state regulations referenced above, they may be subject to local fire and building codes.
Pre-Permit Construction Activities under Minor NSR Air Permit
In a guidance document titled Clarification 2025-03, DEQ has outlined what construction activities are allowed to proceed under Article 6 prior to receiving the air permit. It should be noted that these pre-permit construction activities are only allowed under mNSR air permit and do not cover Article 8 (PSD) or Article 9 (NANSR) permits.
DEQ states that they will rely on the definition of “Begin actual construction” in 9VAC5-80-1120.A to determine what activities are allowed under Article 6. DEQ has outlined that certain site preparation activities such as grading does not, by itself, meet the definition of “Begin actual construction” and the grading of a site is allowed prior to receiving an air permit. Moreover, DEQ clarifies that the storing and staging of equipment on site is allowed prior to receiving an air permit as long as there is no evidence of installing foundations, construction of permanent structures, running electrical wiring, or laying of underground pipework which are integral to the emissions unit.
The most important piece of clarification for datacenters is that DEQ acknowledges that “Begin actual construction” specifically refers to the construction of an emissions unit, in this case emergency engines. Based on DEQ’s interpretation, facilities can start construction on the building that houses the servers and other computer equipment prior to the datacenter receiving that permit, as long as the building does not house the backup or emergency electrical generators requiring an air permit. Additionally, facilities can extend ductwork that may be necessary to connect a potential emissions unit several feet from building structure in accordance with good construction practices. However, facilities should avoid laying foundations or pads for the generators, or installing and connecting the generators themselves, prior to receiving the required air permit. Additionally, even for testing/acceptance purposes, emergency engines cannot be operated before receiving an air permit.
If you have any questions about these guidance documents or need assistance with air permitting in Virginia, please contact Farshid Kiani in the Richmond office or Susan Barnes in the DC/Maryland office.
