Proposed Delaware data center hits major setback from environmental regulators

Environmental agency says the project's design violates the state's Coastal Zone Act.

Published on Feb. 4, 2026

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A proposed 1.2-gigawatt data center in Delaware City has hit a roadblock after the state's Department of Natural Resources and Environmental Control (DNREC) said the project's design is not permitted under the Coastal Zone Act. DNREC cited concerns over the project's large number of backup diesel generators, which would be the state's largest source of nitrogen oxide emissions outside of the Delaware City refinery.

Why it matters

The Coastal Zone Act was passed in 1971 to protect Delaware's coastline and environment from industrial activities. The decision is seen as a win for environmental advocates who have raised concerns about the data center's potential impact on the local ecosystem and community.

The details

The 'Project Washington' data center proposed by Starwood Digital Ventures would include 11 two-story data centers and require 516 backup generators, far exceeding the current maximum of 8 generators allowed in the coastal zone. DNREC said the project's intended use of the diesel generators and a 5-acre tank farm are not compatible with the state's environmental regulations.

  • On February 5, 2026, DNREC announced its decision that the proposed data center project does not meet the requirements of the Coastal Zone Act.

The players

Project Washington

A proposed 1.2-gigawatt data center project in Delaware City by Starwood Digital Ventures.

Delaware Department of Natural Resources and Environmental Control (DNREC)

The state environmental agency that ruled the proposed data center project does not meet the requirements of the Coastal Zone Act.

Coastal Zone Act

A landmark 1971 law in Delaware that protects the state's coastline and environment from industrial activities.

Starwood Digital Ventures

The company proposing the 'Project Washington' data center in Delaware City.

Dustyn Thompson

Director of the Delaware chapter of the Sierra Club, an environmental advocacy group.

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What’s next

Starwood Digital Ventures could appeal DNREC's decision or redesign the project to meet the requirements of the Coastal Zone Act.

The takeaway

This decision highlights the ongoing tension between economic development and environmental protection in coastal regions. It demonstrates the power of landmark laws like the Coastal Zone Act to safeguard sensitive ecosystems, even in the face of lucrative data center projects.