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A proposed 1.2-gigawatt data center in Delaware City hit a roadblock this week when environmental regulators in Delaware said the project’s design is not permitted under the state’s Coastal Zone Act.

The “Project Washington” data center proposed by Starwood Digital Ventures has been met with scrutiny from community members and lawmakers who are concerned about increased electricity bills and potential environmental impacts.

The Department of Natural Resources and Environmental Control on Tuesday said the project’s intended use of backup generation isn’t permitted under the state’s Coastal Zone Act. The landmark law was passed in 1971 to protect the Delaware Bay and the state’s shoreline from industrial activities.

The agency said smokestacks associated with the diesel generators would be the largest source of nitrogen oxide emissions in the entire state, with the sole exception of the Delaware City refinery. The plan would incorporate a tank farm larger than 5 acres, which DNREC said is also not compatible with the state’s environmental regulations.

DNREC Secretary Greg Patterson called the proposed 6 million-square-foot facility “unprecedented.” The largest number of generators currently utilized by any entity in the coastal zone is eight — the facility, with 11 two-story data centers, would require 516.

Environmentalists are calling the decision a “monumental win” for residents and the environment.

“The Coastal Zone Act is a recognition that our coastal ecologies, and the tourism and benefits of resiliency that they provide to the state, is well worth protecting and preserving,” said Dustyn Thompson, director of the Delaware chapter of the Sierra Club. “We’re glad to see the intention of the law being respected with this decision.”

Representatives for Project Washington said they are undeterred, however. Starwood Digital Ventures said its proposed data center would generate hundreds of jobs and generate millions in tax revenue. In a statement, they said they are confident the project will remain on track despite the agency’s decision.

“Project Washington is proud to have the support of the Delaware unions and trades, the business community, and hundreds of New Castle County residents,” a spokesperson said in an email.

“We are committed to working with DNREC, state and local regulators, and the entire community to make certain that Project Washington will be a state-of-the-art, data center campus that will bring thousands of jobs to Delaware.”

Starwood Digital Ventures could appeal DNREC’s decision, or redesign the project in a way that meets Coastal Zone Act requirements.