Data centers have become big business thanks to the increasing role of artificial intelligence and Internet of Things systems in all our lives.

But there are also concerns about just how much electricity and water is needed to keep these centers in operation, and what impact they could have in areas where resources are scarce.

According to recent reseacrch by Morgan Stanley, the global data center industry will see emissions equivalent to 2.5 billion metric tons of carbon dioxide generated by the end of 2030.

Harry Wilson, a senior analyst at global research firm Verdantix, said research shows data centers are now the 10th largest water consumers in the U.S. in an interview.

Wilson added the average mid-size United States data facility is 300,000 gallons of water every day, and a “staggering percentage” of these data centers are in areas with highly-stressed watersheds where demand for water exceeding natural supply.

He said data centre cooling systems require a lot of electricity to power them and if they use evaporative cooling systems, which many do, they will also require a lot of water too.

“If you’ve got facilities utilizing this much water and particularly strained watersheds, it could spell problems for local communities and other watershed users,” Wilson told me.

He added many data centers are now starting to use closed-loop water cooling systems, which waste fewer resources.

Or they utilize “blue roof” and other rainwater harvesting systems to catch rain water.

“Data center operators are responding to this problem,” he added.

“They are starting to look at developing more data centers in northern regions, like Oregon where there is an abundant water supply.”

“We are also seeing something similar in Europe, with data centers operating in Denmark and Sweden. They are moving north, because they don’t necessarily need to use power to actually generate cool for them.

“They are able to take the fresh atmospheric air and use that to cool down the equipment.”

Sara Anzinger, senior vice president for strategy and ESGx at ESG platform Measurabl, said its data benchmarks show data centers can have a 1,000% higher energy consumption and carbon emission rate compared to retail in an interview.

Anzinger said its benchmarking metrics indicate that data centers consume and emit far more than other property types on a per square-foot basis.

She added areas like California, Virginia and Washington have the highest concentrations of data centers.

Anzinger said many operators are now looking at strategies to mitigate risks around physical risk and water stress, especially with growing pressure from investors and the prospect of further regulation.

“There’s a lot being spoken about generative AI and how much more that’s going to drive electricity demand from data centers,” she added.

“And of course, there’s an interesting interconnection between water and energy, which we are tracking closely at the moment.”

Calvin Emanuel, Ecolab’s vice president and general manager, sustainable growth solutions, said data centers are beginning to use artificial intelligence to keep their cooling systems running in an interview.

Emanuel added water is still the most effective and efficient manner for cooling data centers, but it is important to ensure that water is being used in a smart and efficient manner by optimising systems.

He added it was also important to make sure the water is of an appropriate quality to avoid scaling and microbial growth, which can inhibit cooling and lead to higher energy use.

Emanuel added data center operators also need to look at how heatwaves could put additional stress on their cooling systems.

“If you start to have a hotter environment outside, you tend to have increased water scarcity issues, the quality changes, and it becomes even more important that you’re doing an effective job of managing every drop of water in your operation,” he told me.

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