Aligned Data Centers has pulled out of a plan to build 264MW of hyperscale capacity on the Quantum Loophole campus in Maryland after the state limited the number of diesel generators it would be allowed to deploy there.

Quantum Loophole Nov 2022.jpg
– Vlad-Gabriel Anghel

Another provider, Rowan Digital Infrastructure, has stepped in to announce plans for a deployment on another Quantum Loophole plot. However, it is not clear at this point whether that development will be subject to the limitations on diesel backup which stymied Aligned.

Aligned wanted more diesel generators

At the end of 2022, Aligned announced plans to build 3.3 million sq ft of data center capacity. The site would initially use 264MW of power and would be located at the Quantum Loophole campus which is situated on a former Alcoa aluminum smelting plant near Adamstown, in Frederick County.

The company applied for exemptions to the state's emissions rules so it could site 168 diesel generators there, but the exemptions were rejected in August, with the State’s Public Service Commission ruling that they amounted to the equivalent of a single 504MW power plant.

The Frederick News-Post reports that a provisional order from the Commission would have limited Aligned to installing up to 70MW, the maximum capacity Maryland applies for a generating station, the equivalent of 20 3.3MW diesel generators.

Aligned has rejected that order, and pulled out of the project, telling the commission that its order “did not present Aligned Data Centers ... with sufficient relief to permit the project to proceed.”

New generation capacity normally requires a certificate of public convenience and necessity (CPCN), which requires a lengthy public consultation. Single diesel generators are often granted exemptions, and the Commission’s staff recommended approving Aligned’s proposal.

However, the State’s Commission itself unanimously rejected the proposal for 168 generators, 42 of which were needed for the first phase of the build.

Aligned initially said it would go through with the CPCN process, and requested a rehearing, arguing that the State's denial was based on legal and technical errors.

Aligned said that 70MW is not enough power to support its initial buildout, and the uncertainty of the CPCN process made the rest of the project uncertain.

“No company could invest the hundreds of millions of dollars needed to complete the first phase of the project with that uncertainty ... hanging over the project,” Aligned said in a letter reported by the News-Post.

Barrier to business?

At a local level, the decision was met with dismay. Frederick County Executive Jessica Fitzwater’s advisor Pat Murray, said: “The state’s regulatory framework is a barrier to companies investing here,” adding that the County’s data center workgroup would be developing recommendations.

The commission had granted a provisional exemption for 70MW, during the initial building phase and, until this week, Aligned had said it would go through with the CPCN exemption process, having filed a request for a rehearing in September claiming that the commission made legal and factual errors in its original decision.

Aligned claims that the commission has already granted CPCN exemptions for diesel installations greater than 70MW at hospitals and other institutions, and challenged it to reveal those sites and make them go through the CPCN process.

Rowan's arrival in Maryland

On Tuesday, the day before Aligned pulled the plug on its development, Denver-based Rowan Digital Infrastructure, also known as Rowan Green Data, held an open house to discuss plans for the Rowan Frederick data center, a 750,000-square-foot (69,680 sqm) data center to be built on a 151-acre plot in the planned Quantum Loophole campus, announced earlier in October.

Rowan, a subsidiary of Texas-based Quinbrook Infrastructure Partners, has announced plans to build four, one-story buildings on their plot at the southern end of the Quantum Campus, which is double the size of the 75 acres where Aligned had planned to start building.

A local activist commented that the Rowan project will also face objections to any diesel backup, commenting on the News-Post story, under the name TheLorax: “All the same issues apply to Rowan.”

Rowan already has approval to build 135,000 square feet (12,500 sqm) of data center buildings in Bell County Texas, and a million square foot data center project in Morrow County Oregon was approved in September 2023.

Rowan’s site says the company was established in 2020 to provide “net zero power solutions for mission-critical green data centers,” that would “provide our data center customers the flexibility they need to urgently decarbonize their operations.”

An FAQ on the Frederick County project confirmed that the site will have backup power, saying “While power outages in this region are usually infrequent, it is important to have a plan in place for if and when they do occur.”

However, it said the choice of backup power would be up to customers: “The decision about what kind of backup energy technology will ultimately be made by the end user and will balance the need for reliability with our sustainability goals.”

DCD has reached out to Aligned and Rowan for comment.