Data Centers and Water Risk: Planning for Resilience

The rapid expansion of digital infrastructure has made data centers central to economic activity. However, their high water use — particularly for cooling — raises concerns in the face of growing water scarcity. A recent map by the National Renewable Energy Laboratory illustrates the proximity of data centers to regions of water stress across the United States. Water availability must be integrated into data center planning and operations as climate impacts intensify.

Water Use in Data Centers

Cooling is essential for data centers to maintain equipment reliability and prevent overheating. Many facilities rely on water-intensive systems, such as evaporative or hybrid cooling, which require large volumes of freshwater. While energy efficiency and grid access have traditionally driven siting decisions, water risk is a growing factor that must be addressed to ensure operational continuity.

Risks of Water Scarcity

Facilities located in arid regions or areas with variable hydrology are increasingly vulnerable. As competition for water grows among agricultural, industrial, and residential users, data centers may face restrictions, higher costs, or reputational challenges. In the Southwest, for example, prolonged drought and declining aquifer levels place pressure on both public and private water users. Urban growth and seasonal extremes can introduce new constraints even in historically water-abundant regions.

In addition, climate change is altering precipitation patterns, increasing the frequency and severity of droughts and reducing long-term water predictability. These shifts present risks to existing operations and complicate future expansion.

Strategies to Mitigate Water Risk

To enhance resilience, data center developers and operators can adopt multiple strategies to reduce water dependency and exposure to future shortages:

• Site Selection Based on Water Availability: Move beyond traditional criteria to include water stress indicators, long-term climate projections, and local watershed capacity. Favor regions with stable water supplies and proactive water management policies.
• Transition to Air-Cooled Systems: Air cooling systems eliminate water use and are well suited to cooler climates. Though potentially less energy efficient in warmer areas, they offer a practical solution where water resources are constrained.
• Utilize Reclaimed or Non-Potable Water: Partner with municipalities to source treated wastewater or industrial water for cooling, easing pressure on drinking water supplies while supporting circular water use.
• Adopt Closed-Loop Cooling Technologies: Recirculating systems minimize water withdrawals by reusing the same water, reducing consumption while maintaining effective cooling performance.
• Conduct Water Efficiency Audits: Routine audits help identify inefficiencies, leaks, and opportunities for upgrading equipment or retrofitting systems to enhance conservation.
• Install Onsite Water Storage: Storage systems can buffer against short-term supply disruptions, reduce peak demand pressures, and support emergency operations during drought events.
• Engage with Local Water Stakeholders: Early and ongoing collaboration with utilities, watershed managers, and community groups ensures alignment with local planning and promotes responsible resource use.

Towards Integrated Infrastructure Planning

Data centers should not be planned in isolation from their environmental context. Integrating water considerations from the earliest stages of development supports operational stability and climate adaptation. Water, like energy, is a foundational input that must be resilient and sustainable over time.

Investors and regulators are also considering water risk a material concern. As a result, disclosure of water use, efficiency measures, and long-term risk management strategies is becoming a standard expectation for transparency and accountability.

Conclusion

Data centers are indispensable to the digital economy, yet their dependence on water presents a growing challenge under climate change. Operators can reduce risk and enhance resilience through improved siting, water-efficient technologies, and greater collaboration with local stakeholders. Future infrastructure planning must balance technological demands with environmental limits to support digital growth and sustainable water use.

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