Key facts
- The U.S. electrical grid expansion is hindered by power equipment shortages, impacting AI-driven demand.
- Planned U.S. natural gas power capacity directly linked to data centers totals 189 GW.
- Global data center water consumption could nearly triple to 644 billion liters annually by 2030 without mitigation.
- Water-efficient cooling technologies and operational strategies could reduce data center water demand significantly.
- Major data center operators are setting targets to become water positive by 2030.
- Regulatory efforts for data center water usage are emerging globally and within the U.S.
The rapid expansion of artificial intelligence is driving a significant increase in demand for data center capacity, which in turn is fueling a boom in the construction of new U.S. natural gas power plants. Approximately 189 GW of planned natural gas power capacity is directly linked to these AI-driven facilities, with an additional 378 GW of gas-fired power capacity in development overall.
However, this expansion faces considerable hurdles. Shortages of critical power equipment, such as transformers and substations, are already hindering the U.S. electrical grid's ability to keep pace. Furthermore, the immense water requirements of data centers are coming under increased scrutiny. Without significant water-saving measures, global data center water consumption could nearly triple to 644 billion liters per year by 2030. More efficient cooling technologies and operational strategies could reduce this figure to as low as 388 billion liters annually.
Water consumption varies greatly depending on cooling technology, climate, and operator practices. While AI servers generate more heat, advanced cooling methods like rack-level liquid cooling can reduce the strain on facility-level systems and enable greater use of dry cooling, which is more effective in colder climates. The indirect water footprint from electricity generation also adds complexity, with the indirect portion potentially being more than double the direct consumption in the U.S.
Major data center operators, including AWS, Google, Microsoft, and Meta, have committed to becoming 'water positive' by 2030, aiming to replenish more water than they consume through various restoration and efficiency projects, particularly in water-stressed areas. Regulatory frameworks are also beginning to emerge, with the EU planning an energy efficiency package and Singapore implementing a green data center roadmap. In the U.S., regulations vary by state, and Texas has recently placed a moratorium on new data center approvals pending audits of their resource usage.
Regions facing high water stress are expected to account for a significant portion of future data center water consumption. Implementing water-efficient cooling technologies could substantially reduce demand in these vulnerable areas. Despite these efforts, bottlenecks in gas turbine supply and long lead times for plant construction pose risks to the realization of some planned natural gas power projects.