Data centers should be co-located where possible with existing water facilities, such as wastewater treatment plants. They need lots of water for cooling. The need for water can be an important constraint on location.

Water Usage

Complex computing requires large amounts of cooling water. Data centers get their water primarily from municipal or regional water utility companies. On average, alternative water sources contribute less than 5% of water used by the typical data center.

Alternative sources include on-site groundwater, surface water, seawater, produced water (a byproduct of oil and gas extraction), non-potable water such as greywater (treated sewage), recycled wastewater and rainwater harvesting systems.

Once water is used to cool a data center, several further uses for the water are possible, depending on the cooling system design and environmental regulations.

In many cooling systems, the water is recirculated. After absorbing heat from the data center, the warm water is cooled down again through various methods like cooling towers or heat exchangers and then reused. Some cooling systems discharge used water as industrial wastewater, usually into a nearby wastewater treatment facility or a body of water like a river, lake or ocean. However, this cooling water discharge is usually regulated to ensure the temperature and level of any chemical or waste constituents in the discharged water are not so elevated that they might harm the local ecosystem. In systems like cooling towers, a portion of the water evaporates and is consumed while cooling the remaining water. This evaporation leads to water loss.

The goal should be to treat cooling water so that it can be reused in the cooling system of the data center. Such recycling requires the water to meet certain quality standards, such as acceptable hardness levels. In regions where fresh water is scarce, data centers can be put next to recycled municipal or industrial wastewater treatment facilities.

Water usage effectiveness (WUE) is a key metric for assessing the water efficiency of data centers. It measures the amount of water needed to cool the equipment.

WUE is calculated as the ratio of the data center’s annual water usage in liters to the energy consumed by its computing equipment measured in kilowatt hours.

Cloud service providers and major internet companies, often referred to as hyperscalers, publish data on their data center water usage. Many of the largest hyperscalers have previously pledged to be water positive by 2030, meaning they plan to leave more water for public use than is withdrawn by adopting water-saving strategies and working with ecological or infrastructure experts to increase the health and resilience of the local watershed.

Site Selection

Data center developers look for sites that are near urban centers where connectivity and access to skilled labor are readily available.

Ideal sites should also provide access not only to water, but also to pre-existing infrastructure, such as roads, energy supply and utility lines.

Certain climates pose significant challenges for water-intensive operations. Data centers in water-scarce regions often contract for treated water supplied by municipal or industrial wastewater treatment facilities.

A successful real estate strategy should account for the large footprint requirements, strict land-use constraints and substantial utility demands.

The developer must decide whether to purchase or lease the property where the data center and any adjacent water facilities will be constructed. Municipal water treatment facilities are usually publicly owned and operated. A private data center developer interested in putting the data center next to such a facility may need to enter into a long-term lease or concession agreement where the municipality or utility retains fee ownership of the land underneath the water treatment facility. Such an agreement must allow the construction and operation of both facilities and any necessary utility upgrades.

The site must be large enough to account for applicable setback and zoning requirements while accommodating both the data center and water treatment facilities.

County and municipal zoning ordinances must allow utility and data center dual use or the project must be in a jurisdiction amenable to granting a special-use variance. Community support is critical anytime a project merges public infrastructure and private development, as it must obtain approvals from multiple stakeholders, including city councils, public utility boards, regulatory agencies and the public.

Easements and utility access agreements are important. Water treatment facilities demand significant intake and discharge capacity, potentially involving riparian rights or long-term water rights agreements if the jurisdiction recognizes water severances. Developers must secure the rights to install and use essential utility infrastructure, including transmission lines, fiber optics and wastewater systems. Third-party consents for property interests with priority over the project may also be required.

Water treatment facilities and data centers both often require heightened security and access control due to the information housed at data centers and the public health and environmental impact of water treatment facilities. Site control plans may require dedicated entrances for data center personnel, enhanced fencing and access controls, and agreements on shared surveillance and security procedures.

Alignments

Water treatment facilities can provide a distinct advantage for co-located data centers due to their existing infrastructure and operational designs.

These facilities are typically situated on large parcels of land, offering ample space to accommodate additional structures. Their expansive layouts are well-suited for integrating the sizeable cooling and power systems required by data center operations.

They have established utility connections, including high-capacity water supply systems, wastewater discharge pipelines and electricity grids. Municipal water treatment plants often maintain redundancy in their utility networks to ensure consistent service, a feature that can help ensure uninterrupted operations for data centers.

Geographic placement of water treatment facilities often aligns with the strategic priorities of data centers. Such facilities are usually located on the outskirts of urban centers, balancing proximity to densely populated areas with access to less congested, industrial zones. In “data center alley” in Loudon County, Virginia, outside Washington, DC, local utility Loudoun Water offers a service to provide data center operators with reclaimed water. Hooking up to the recycled water loop can reduce the impact of a data center on the potable water supply.

Environmental and Regulatory Considerations

Water regulatory requirements can become a significant point of diligence for data centers that co-locate with water treatment facilities. Developers must navigate local, state and federal regulations governing water use, wastewater discharge and environmental protection.

In many jurisdictions, water-intensive projects must demonstrate long-term plans for resource conservation and management. Developers may need to conduct water availability assessments, prepare drought mitigation strategies and provide assurances that the project will not adversely affect local water supplies. Projects co-located with water treatment facilities or water recycling facilities may find it easier to satisfy these requirements.

Environmental regulatory and permitting considerations may differ depending on the type of co-location project contemplated. For example, if data center cooling water will be routed to the wastewater plant for treatment, the data center cooling water effluent must meet the treatment plant’s existing wastewater treatment permit requirements. This may be more complicated for publicly-owned treatment works facilities.

An existing water treatment facility may need to modify its treatment works to accommodate any unique constituents in the data center effluent, or may need to expand treatment capacity. Depending on the nature of the data center effluent and other wastewater streams being managed, the treatment facility’s discharge limits may need to be adjusted to satisfy environmental regulatory standards for effluent discharged into receiving waters, like rivers or lakes.

In addition to ensuring treated wastewater does not foul the data center cooling system, any residual hazardous constituent in the treated wastewater received by the data center also should be considered. For example, PFAS has become a common concern for managing wastewater treatment sludge, which is often used to produce fertilizer, potentially subjecting treatment plant operators and parties routing wastewater effluents to such plants to environmental liability.

In contrast, if a developer will co-develop a new dedicated wastewater treatment plant, whether under private ownership or as a public-private partnership, there may be more flexibility in up-front treatment system design. Modification of existing treatment facilities may be less cost-effective and may present greater technical challenges, particularly if the footprint is limited. On the other hand, developing a new co-located wastewater treatment facility may present greater challenges meeting environmental regulatory standards and obtaining required permits, particularly in areas with strong stakeholder resistance.

Integrated Design

Waste heat generated by data centers can be repurposed for water treatment processes, such as sludge drying at municipal plants. Projects in Scandinavian countries, such as Sweden and Denmark, have experimented with use of waste heat from data centers for municipal water treatment processes.

Combined heat and power systems, also known as cogeneration, enable water and wastewater treatment facilities to produce both electricity and useful thermal energy from a single fuel source, such as natural gas, biogas generated during the treatment process, landfill gas or even renewable hydrogen in some advanced applications. These systems significantly improve energy efficiency by using the heat that would otherwise be wasted during electricity generation. Co-located data centers and water treatment plants with CHP systems can use the electricity to power operations on-site and the thermal energy for heating digesters or buildings. The thermal energy can also be used to support absorption chillers that cool data centers, thereby reducing the need for water-intensive cooling methods. This type of integration has the potential not only to enhance energy efficiency and resilience, but also to contribute to water conservation and reduced greenhouse gas emissions.