Data centers are popping up around the United States, and in more arid areas like Colorado, experts say the huge complexes should come with a warning label when it comes to water use.
Data centers have been powering computing efforts for decades, but as the potential of artificial intelligence models has become more clear, so has the need for more computing power. That means more servers, routers and the huge complexes that house them.
The boom in data centers is already raising concerns about ripple effects in other industries, including agriculture which is the largest water user in Colorado. Electricity and water utilities are wrapped up in powering servers and keeping them cool. But AI advancement will have trade-offs, experts say.
“Additional growth in water use can happen, but that just means you’re going to be putting other types of use at risk of declining more dramatically,” said Bart Miller, healthy rivers director for the environmental advocacy group Western Resource Advocates. “Ag is the piece that will ultimately suffer the most from additional use in other sectors.”
So as data centers boom, what are the risks, benefits and impacts on other industries, ratepayers and local economies? Are regulators keeping up?
And how do data centers really use water anyway?
Good questions, all, and we — the human journalists at The Colorado Sun — have mined a slew of answers for you.
What is a data center?
A data center is a physical facility that houses and runs large computer systems.
Data centers can range from closets to larger rooms within a business to 60,000-square-foot complexes that contain thousands of servers and miles of connection equipment. They house routers, switches, firewalls, storage systems, servers, and systems for cooling, ventilation, security, fire prevention and more.
Businesses use data centers for tasks like email and file sharing, customer relations, resource planning, virtual desktops, communications and collaboration, and, yes, AI services.
Data centers date to the 1940s, and often looked like massive machines held in rooms. The U.S. military completing the Electrical Numerical Integrator and Computer at the University of Pennsylvania is a prime example.
In the 1990s, microcomputers came on the scene, reducing the amount of space needed for IT operations. Cloud computing, which boomed in the early 2000s, changed the game again prompting the construction of larger, more advanced data centers, like the first hyperscale data center launched by Google in 2006. The Oregon-based facility covers 1.3 million square feet.
Modern data centers come in many shapes and sizes, from smaller facilities owned by businesses for internal use to shared spaces and enormous facilities. They can vary by purpose — AI data processing and training to cloud services — and structure. Some are owned and operated and used by the same company. Some use leases to share the data center’s infrastructure.
Data centers need to be always on, at every level. Cables must be far enough apart to avoid generating too much heat or impacting data transfer rates. They’re finely tuned facilities that try to control temperature, humidity, static electricity and the risk of fire. Their operations can be impacted by natural disasters, political disruptions and more — which makes where a data center is located a complicated equation.
Why are there so many new data centers?
AI services need more computing power than what we’ve been using, which means AI also needs more infrastructure. That’s where these new data centers come in.
For years, the processing capacity in data centers has had steady growth and been able to meet the demand coming from services like Vemmo, emails, apps and Zoom.
But training and running AI models, like ChatGPT and Google Gemini, involves more intensive computational tasks. Powerful central processing units, called GPUs, which are often preferred for AI workloads, consume 10 to 15 times more power per processing cycle than the more traditional units, CPUs.
And that has spurred the construction of hyperscale data centers, or at least negotiations with communities around planning potential future complexes. More power needed — plus the expectation that demand will only grow — equals more infrastructure needs.
These massive complexes are popping up in communities and headlines.
For the most part, Colorado is a market for smaller data centers. The state has about 56 data centers with 47 in the Denver area and six in Colorado Springs, according to the Data Center Map. One hyperscale data center is being built by QTS Realty Trust in Aurora.
Virginia has 566 data centers, and Texas comes in second with 391, according to the Data Center Map.
“The data center industry has done a really good job of messaging that our entire lives are online so these are necessary pieces of infrastructure,” Deborah Kapiloff, clean energy policy advisor with Western Resource Advocates. “What has spurred this exponential growth is artificial intelligence.”
The South Platte River viewed from the Clear Creek Trail on Sunday, Aug. 8, 2021 in Denver. The river originates west of Denver and is a major source of water for the fast-growing Front Range region. (Olivia Sun, The Colorado Sun)How, and why, do data centers use water?
Many data centers use large volumes of water to cool and protect their computer hardware.
It’s hot work running AI queries, and data centers need to stay at a steady temperature. To do that, data center companies rely on a handful of strategies:
Refrigeration cooling systems remove hot air, which is then cooled by an air- or water-cooled chiller, then circulate cool air Direct-evaporative-cooling systems, like huge swamp coolers, use water to cool air that is circulated in the data center Free-cooling systems use outdoor air and water temperatures to cool the air inside the data center Liquid-cooling systems directly absorb heat from the computer equipment using water or other specialized coolants, instead of cooling the surrounding air.Some data centers might have their own wells to siphon water from underground aquifers, and in some cases might even have to build treatment plants for that water depending on the quality of the well.
Many data center companies hook up to an existing water utility’s system of pipes and taps. In some cases, the data center will rely on water that has already been treated to drinking water standards, which adds to a water utility’s service load. Drinking and wastewater treatment plants have capacity limits for how much water they can process per day.
Reader Question: What is the best technology for reducing water use in data centers?
There isn’t a one-size-fits-all solution for this, yet. The best technology for reducing water use depends on a lot of factors around a data center, including the climate, where the data center is located, how good its airflow efficiency is, and humidity and temperature parameters for operations at the center.
Refrigeration cooling systems with air-cooled chillers use more energy and no water, according to Western Water Resources. Water-cooled chillers that use a cooling tower are generally the most water-intensive form of cooling system at a data center, although it’s less energy intensive than some others.
Direct-evaporative-cooling systems, which resemble mega-swamp coolers, work better in dry climates than humid areas. Free-cooling systems need to be near water bodies or areas with cooler outdoor air temperatures.
Liquid-cooling systems are more efficient at removing heat from servers, which makes the data center more energy- and water-efficient overall.
The pressure on water supplies varies from watershed to watershed around the country, which means it’s about location, location, location.
When a data center company approaches a water utility to tap into its drinking water system, the company might have to pay a tap fee or other costs to cover the impact of its use.
Or, water utilities will provide the service if data centers can secure additional water rights to cover their usage and then transfer the water to the utility.
That can put more pressure on water availability — especially in areas where there are already so many legal rights to access water that a river or stream is actually over-appropriated.
And where might data center companies turn for new water rights? Buying up irrigation water used to grow crops and raise livestock, leaving the cropland to dry up and potentially be used for something else, experts say.
“A big concern that I have is that we’re going to see more ag land buy-up and buy-and-dry associated with data center growth,” Lindsay Rogers with Western Resource Advocates said.
What is the hidden water use in data centers?
Energy generation also requires water, and hyperscale data centers for AI models need a lot of energy.
Solar and wind energy don’t need water, but natural gas and coal generating stations do. These power plants use steam to spin turbines, and then often use cooler water to condense the steam.
Major electric utilities in Western states, including Colorado, are forecasting a 4.5% increase in energy demand per year between 2025 and 2035. The Department of Energy estimated that national data center load growth has tripled over the past decade and is projected to double or triple by 2028.
On-site water use at data centers in five Western states — Arizona, Colorado, Nevada, New Mexico and Utah — might grow by about 21,600 acre-feet by 2035. But if you count off-site water use by power plants, a data center’s total water use balloons to over 89,700 by 3025.
One acre-foot roughly equals 325,900 gallons of water, or the annual water use of two to four urban households.
In 2024, the federal government paid water users in several of these states (mostly farmers) more than $28.6 million to do 110 water conservation projects to help the overstressed Colorado River Basin. They managed to save 63,631 acre-feet of water.
Reader Question: What is Colorado doing about data centers?
The Colorado Public Utilities Commission, major electric utility providers and state legislators are weighing in on data center development.
One of the central issues is that data center companies are dating around. A utility or city council might get a development proposal from a company that is also talking to other cities in other states. If proposals run the risk of falling through, then utilities don’t know how to plan for their future electricity system build-outs.
The Colorado utilities commission, called the PUC, has outlined negotiating principles for electric utilities in talks with data center companies. These include up-front fees, 15-year contracts, security deposits and early-exit fees of 75% of all the electricity that would have been used.
Other power providers, including Tri-State Generation and Transmission Association, are working toward creating “large-load tariffs.”
Competing bills are making their way through the state legislature. An industry-backed bill aims to lure data centers with tax breaks in exchange for investments in infrastructure, jobs, and efficient water and electricity systems. Another bill focuses less on luring companies and more on holding them to the highest environmental standards.
But more work is needed, especially when it comes to public information around water use — both on-site and off-site, experts say.
And utilities are also making decisions about the benefits of growth and the risks of growing too much. If they build too many new transmission stations to meet the projected demands of AI data use — and then those projections don’t become a reality — who’s left holding the tab? The current ratepayers.
“Allowing the Company to procure a surplus of new generation to attract prospective large customers places an unacceptable amount of risk on the existing customers,” the PUC said in a filing related to Xcel Energy generating capacities.
Reporter’s note: Colorado Sun readers are sharing their questions about the Colorado River and how it ties into water issues across the state. This story was partly written in response to those questions. You can also share your question here and stay tuned for responses in future news stories.
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