Water matters for data centers

Key Takeaways

AI-ready capacity is expected to grow about 33% annually from 2025 to 2030, in a mid-range estimate. The best available national estimate is that U.S. data centers directly consumed about 17.4 billion gallons of water in 2023, up from an estimated 5.6 billion in 2014, according to Lawrence Berkeley National Laboratory. 

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Data Center Series: Water Use and Cooling

That is water used on-site, mostly for cooling. National totals can look small while a single county feels a large new customer. Data centers often cluster in a few places, need treated water and use the most when demand is already high in hot weather. This growing demand is driving data center development nationwide, accelerating local proposals and the importance for county officials to understand impacts to energy, land and water resources. 

Why data centers need water 

Nearly all the electricity that powers a data center’s servers turns into heat, which must be removed to keep the equipment from overheating. AI workloads pack more computing power into each rack of servers, so more heat builds up in a smaller space. 

Cooling breaks down into four functions 

Step 1: Heat is generated: nearly all electricity used by IT equipment becomes heat 

Step 2: Heat is captured: by air, direct-to-chip or immersion cooling 

Step 3: Heat is transferred: to a facility loop through equipment such as chillers 

Step 4: Heat is rejected: to outdoor air or water, which largely determines water consumption 

The amount of water a facility uses depends largely on the last step of cooling, when heat is released outside the building. Many facilities use evaporative cooling, in which water absorbs heat and evaporates. It is the most efficient method of getting rid of heat, but it can put the most strain on water supplies. Others use fans and outdoor air, depending on weather, equipment and operating temperatures, which uses far less water but more electricity and can make more noise. Many designs combine the two, leaning on water mainly during hot weather. 

“Closed-loop” cooling, in which coolant circulates in a sealed system instead of evaporating, has become popular. A data center might use a closed loop to cool its chips and still evaporate water at the final stage. 

Data centers also use water indirectly, through the power plants that supply their electricity. Across the entire power sector, fuel-burning and nuclear plants consumed an average of about 2.9 billion gallons of water a day from 2010 to 2020, according to the U.S. Geological Survey, but that figure covers all electricity users, not just data centers. 

For data centers specifically, Lawrence Berkeley National Laboratory estimated that power generation consumed an additional 211 billion gallons in 2023, about 12 times what the facilities used directly. That water is typically untreated surface water or groundwater, not drinking water but researchers caution that there is no accurate national data on data center water use. 

A different kind of water customer 

Comparing data centers with other big water users is difficult. Farms and power plants generally use untreated water. Data centers often need treated water, which usually comes from public systems. 

Where a facility gets its water matters as much as how much it uses. Water may come from a public utility, a reclaimed water network or direct groundwater and surface withdrawals from aquifers, rivers and lakes. Wastewater can include blowdown containing treatment chemicals. Sewer discharge is typically reviewed by the receiving utility, and direct surface discharge requires National Pollutant Discharge Elimination System authorization. Impacts range from minimal to substantial depending on design and local conditions. Concerns may include water availability and discharge quality. Each raises different questions about capacity, infrastructure and downstream effects. 

Data center wastewater can contain treatment chemicals such as biocides and anti-corrosives, depending on the cooling design. Discharge to a sewer typically requires review by the receiving utility, while discharge to a river or lake requires federal pollution-discharge permitting. 

Authority over these decisions is often split, varying by state and county, but counties often face land, energy and water decisions at once. Counties may run a water utility, share responsibility with other agencies, review land use or have little say at all. Water systems are interconnected, and impacts don’t stop at a jurisdiction’s boundary. 

How some counties are responding 

Faced with proposals for new data centers, counties have taken different approaches to protecting their water supplies and controlling infrastructure costs. Some counties have made water availability part of the land-use approval process, requiring developers to prove their water supply meets state requirements. 

Others have used development agreements to make companies responsible for their own water and wastewater service, including paying for any on-site and off-site upgrades. 

Other county approaches include requiring county approval for any new wells or barring the permanent use of drinking water for cooling instead focusing on reuse systems. 

Several counties have focused on the water-cooling technology and type of water that can be used by requiring closed-loop cooling systems that use a limited amount of non-potable water, reserves drinking-quality water for plumbing fixtures and prohibits the use of groundwater. 

County considerations and questions 

NACo has put together a data center 101 planning checklist for officials contemplating data center development and is currently developing a technical brief in the County Consideration Series specifically on water use and technology.

The following considerations and questions are intended as starting points for discussion and may not directly apply to every county as legal authority varies by state: 

• Work out which approvals are needed and which agency controls each.
• Check how much water capacity is left after existing commitments and seasonal limits and ask for backup or curtailment plans. 
• Request detailed water-use estimates, including initial fills, construction and average and peak demand, and reviewing the chemicals involved and how wastewater and emergency discharges and releases would be handled. 
• Request in clear language who pays for and maintains infrastructure, how water use will be metered against projections and what happens if the project closes or changes hands.