Cooling the cloud: A focus on the water usage of data centres

Data centres are the backbone of our information-driven society, powering everything from AI to cloud computing. However, there is a growing awareness of their environmental impact, particularly their water usage.

With the rapid rise in AI, new research is uncovering the real cost of such demands. A recent study from the Washington Post and The University of California, Riverside found that writing a 100-word email using Chat GPT’s GPT-4 model consumes 519 millilitres of water – four times more than originally thought. Data centres have always consumed high volumes of water. The mammoth compute power of AI models means they are consuming even more.

How do data centres use water?

Data centres consume water in three main ways: cooling, generating electricity, and manufacturing semiconductor chips. Among these, electricity generation is generally the most water-intensive process and abating usage will depend on a data centre's choice of power supply. Water used in manufacture of semiconductor chips is something that data centres have comparatively less control over. Global semiconductor manufacturers are few in number and need ultrapure water to rinse residue from silicon chips during the chip fabrication process. This is largely the reason why it takes 190,000 litres to make a laptop. Cooling is the one of the three where water is consumed by a data centre itself.

Data centres’ servers generate significant heat, which requires efficient cooling systems to maintain optimal operating temperatures and prevent overheating. These cooling systems allow them to serve demand 24 hours, 7 days a week.  

For the purposes of cooling, data centres mainly use potable water (water that is safe to drink or use for cooking, free from harmful contaminants). There are various types of water-cooling methods, from chillers to cooling towers. Some cooling methods allow for the recirculation of water. However, water cannot be recirculated infinitely. Unless there is a closed loop cycle, some will be lost to evaporation. More importantly, concentration of conductivity and scale formation will increase in each cycle. Eventually, the water must be replaced.

Once used, the water is returned to the environment through various means. It may be released back into local water bodies after treatment to ensure it meets environmental standards or used for alternative functions such as irrigation or flushing toilets.  These practices are crucial for maintaining a balance between the operational needs of data centres and the preservation of local water resources.

Alternatives to potable water

Innovative cooling methods provide opportunities to transform the data centre industry. A number of data centre suppliers including Danfoss, Airsys and Castrol offer direct to chip (DTC) cooling solutions whereby a liquified coolant is circulated around the hottest part of the server in a data centre. This does away with the need to cool the cavernous space around the servers and the parts of servers which are less prone to overheating.

Submersion of servers within a tank containing either water or a different fluid is another option. These methods have higher up front capex than traditional fan-based cooling however may bring savings to data centre businesses in opex over the long term. Taking submersion one step further, in 2023, Highlander deployed its first underwater data centre near Hainan Island, China. Whilst this approach poses obvious logistical challenges and surely much higher maintenance costs, it is one of the greenest methods of all by using the natural cooling properties of seawater.

Harnessing an alternative natural resource, the GAK Sejong facility in South Korea employs a self-developed hybrid cooling system that can utilise natural wind for cooling, selecting air sources depending on weather conditions. 

Both innovative cooling methods alleviate pressure on demand for potable water as well as reducing energy consumption. The GAK Sejong also reduces urban energy consumption by reusing waste heat from its servers for central heating and other purposes downstream.

Legislative crack down on data centres

Whilst there are several examples of voluntary measures to save water consumption, EU legislators are not content to rely on the data centre industry self-regulating. Up until recently, some large tech firms considered their water usage to be somewhat a trade secret. The Energy Efficiency Directive (2023/1791) and subordinate regulations establish annual environmental reporting obligations for data centres above a certain size. Water usage is included as one of the key performance indicators. Data centres are therefore required to audit and publish their usage of potable water (in addition to other information), in accordance with the requirements adopted under the directive.  Member states are required to penalise non-compliance. Although the means of enforcement is left to each member state. This directive is in essence only a reporting requirement. However, it might pave the way for future laws treating water footprint similarly to the carbon footprint of major consumers with a carrot and stick credit trading system akin to the Emissions Trading System (ETS).

In England and Wales, water consumption of a proposed development is a relevant consideration for a local planning authority. Under public law principles of English law, it is generally impermissible to challenge the weight afforded by a local planning authority to one relevant consideration over another. Therefore, local bodies have wide-ranging powers to turn down applications for large data centres in areas where a strain would be put on local fresh water supply.

The wider green footprint

Water aside, data centres face a huge challenge to procure other resources they need to meet the explosion in demand over coming decades. The list includes copper for cabling and rare earth materials for semiconductor chips. Top of that list is electricity. Common to data centre-hosting states is that domestic electricity retail markets are unable to satisfy demand. In the USA, where data centres consume 4.4% of gross power, Microsoft recently signed a 20 year private power purchase agreement (PPA) with Constellation to re-open the Three Mile Island power plant in 2028. The trend towards private procurement of energy for large data centres is only going in one direction. With constraints on transmission networks, some predict that data centres will increasingly turn to self-generation on or close to site.

Procuring an adequate power supply is one challenge for data centres. Procuring a green power supply is an even greater challenge. We are seeing some data centre clients sign PPAs with renewable generators to rebalance their reliance on fossil fuel generation.  For hyperscale data centres, nuclear energy generated by small modular reactors (SMRs) could be a promising solution in the mid-term. Another solution is on-site gas-powered operations using biomethane, mass-balanced through the gas grid from UK-based biogas plants. In 2023, AstraZeneca signed a first-of-its-kind GPA (Gas Purchase Agreement) deal in the UK with generator Future Biogas to purchase a private unsubsidised green gas supply over the next 15 years. The Moor Bioenergy site went live last month. In contrast to SMRs, this solution relies on existing proven and scalable technologies.   

Several key European players have signed up to the Climate Neutral Data Centre Pact, covering both water and electricity consumption. The pact sets a target for its signatories to be climate neutral in 2030. This is an ambitious target. Some of the reduction will need to come from technological advances and already, we are seeing new AI models such as DeepSeek claim an advantage because they require less compute power. Reduction in levels of water and electricity usage is becoming a key feature in the investability of data centres and AI businesses alike. We predict environmentally sustainable methods will increasingly provide both protection from sanctions and a competitive edge in the market of tomorrow.

This article was written by Flora McCarthy, Ella Wolfenden and Patrick Jones.