Australia’s current, unsustainable and rapid expansion of data centres has resulted in serious water and sustainability issues. 2024 saw the largest investment in the world for data centres ($10 billion investment). With over 250 data centres located primarily in populous cities such as Melbourne and Sydney, these facilities consumed nearly four terawatts of electricity, accounting for about two percent of the total grid-supplied power.
UK electricity demand from data centres is estimated to triple by 2030. This unprecedented growth will come with serious consequences for our water supply. It takes about 25.5 million litres per one-megawatt (MW) data centre just to cool them down. This insatiable demand for water raises important questions about the way forward for Australia as we try to satisfy greater demands on finite resources in more sustainable ways.
Water Consumption and Cooling Systems
Data centres utilize two main types of cooling systems: closed-loop and open-loop systems. Closed-loop cooling systems consume water far more efficiently. They reduce water use by 50 to 75 percent compared with data centers. Compared with the open-loop counterpart, these closed-loop systems consume 90% more water but use 50% less energy to operate.
The contrast in water use between these two systems is dramatic. Selecting the best technology will be key to achieving the sector’s potential for environmental benefits. Industry leaders such as CDC Data Centres have led the way by implementing cutting-edge solutions to preserve water resources.
“CDC is … a leader in water conservation, with its closed-loop LiquidCoreTM cooling system consuming near-zero water, saving billions of litres of water annually across 16 CDC-operated data centres in Australia and New Zealand,” – The National AI Plan
CDC highlights their sustainability goals through the use of facility designs that seek to reduce water use for primary cooling needs.
“Unlike other data centres, CDC designs its facilities to eliminate water consumption for primary cooling purposes,” – CDC spokesperson
It’s not just the immediate water needs of data centres that are concerning – it’s the future demands they represent. Sydney Water projects that data centres could account for up to a quarter of the city’s annual drinking water by the end of the decade.
Impact on Local Water Supply
Greater Western Water is currently processing 19 applications for data centre connection. These centres are asking for approval to be able to use nearly 20 gigalitres of water annually. This volume is on par with the annual water consumption of about 330,000 of Melbourne’s 5 million residents. As these facilities keep spreading like wildfire, local governments find themselves caught between the desire for economic development and protecting water resources with smart growth.
To further counter this risk, Melbourne Water started to investigate recycled water as an alternative option for the city’s data centres. This strategy would be in line with recommendations from water supply experts, who have long promoted focusing on non-potable water supplies, including recycled water and stormwater, as a higher priority.
“Our position is that large industrial users of waters, like data centres, should prioritize the use of non-drinking water, including recycled water and stormwater,” – Chris Brace
Environmental advocates have urged that data centres be built near existing wastewater treatment facilities. This strategy to augment water supply through utilizing recycled water will continue to reduce the demand on potable water supplies.
“Understanding where the water’s going to come from reliably is going to be a key thing for data centres in terms of where we approve their locations, just as it would be for energy,” – University of Sydney’s Professor Stuart Khan
Future Outlook and Recommendations
International demand for artificial intelligence (AI) has surged. According to sector projections, by 2027 this sector could use up to 6.6 billion cubic meters of water. This worrying number highlights the immediate need for greener strategies in Australia’s growing data centre sector.
Experts suggest a more strategic approach in both planning and siting new data centres. Climate resilience and environmental justice concerns lead Professor Fletcher to suggest more deliberation on water supply wherever planning designated facilities.
“First of all is what water will we provide to data centres? And then the next question that flows from that is, well, therefore, where should we put them?” – Professor Fletcher
If local authorities can effectively manage where these facilities are built, there may be potential to access large supplies of water without compromising potable water security.
“If you get the planning of where these things are built you could have a really large supply of water that’s having no impact on our potable water security,” – Professor Fletcher
With Australia’s commitment to sustainability increasingly challenged by technological demands, it is vital that industry leaders and policymakers collaborate on innovative solutions. The goal should always be to cultivate responsible water management practices that stimulate economic growth and environmental stewardship alike.
