Water Use and Regulation in Data Centers: Preparing for the 2026 Standard

Water has become the second-largest constraint on new data center development, surpassed only by power availability. A single hyperscale campus can now evaporate more water daily than a town of 10,000 people.

With AI training and inference workloads driving unprecedented cooling demands, U.S. data centers consumed an estimated 17-20 billion gallons of water directly in 2024-2025. Analysts project this figure could quadruple by 2030. Globally, the International Energy Agency forecasts data center water withdrawals will exceed 1,200 billion liters annually by the end of the decade.

These numbers are already triggering permit denials, community opposition, multi-year delays, and forced redesigns worth hundreds of millions of dollars. As we head into 2026, water strategy is no longer optional; it is mission-critical.

Key drivers pushing water to the top of the risk register:

• AI workloads have increased cooling demand 3-6× since 2022
• Two-thirds of new U.S. hyperscale campuses built since 2022 are located in high or extreme water-stress counties (Bloomberg, May 2025)
• Major 2024-2025 flashpoints include Google's partial permit revocation in Chile, ongoing groundwater battles in Arizona, "no-net-increase" water clauses in Virginia, and the continuing moratorium in The Netherlands
• Result: water supply agreements and NPDES permits are now on the critical path for virtually every new project

• 80–90% of direct water consumption comes from evaporative cooling towers (evaporation + blowdown + drift)
• Current industry average Water Usage Effectiveness (WUE): 1.8 liters per kWh
• Best-in-class facilities using 95%+ recycling now achieve <0.2 L/kWh
• Indirect water use (power generation) remains 8–12× higher than direct use in most U.S. regions

Latest disclosed or reliably estimated annual direct water consumption:

• Microsoft: 7.8 billion gallons (2024, +34% YoY)
• Google: 6.3–6.8 billion gallons
• Amazon Web Services: estimated 5.5–7 billion gallons
• Meta: 1.1 billion gallons
• Oracle Cloud: 600–900 million gallons and rising rapidly

Notable facility extremes:

• Google Council Bluffs, Iowa: >1 billion gallons in a single year
• Google The Dalles, Oregon: historically consumed >25% of local municipal supply
• Microsoft Quincy, Washington air-cooled campuses: <50,000 gallons/year (versus new liquid-cooled campuses targeting <0.1 L/kWh using reclaimed water)

This variance highlights the dramatic impact that cooling strategy, facility design, and local water availability have on total consumption. The industry's largest operators are now publishing detailed Water Usage Effectiveness (WUE) metrics and committing to aggressive water-positive targets by 2030.

Federal baseline (EPA rules taking full effect 2026):

• NPDES individual or general permits required for all cooling tower blowdown
• Strict limits on discharge temperature, TDS, pH, PFAS, quaternary ammonia biocides, and legionella
• Real-time continuous monitoring increasingly required
• Legionella Risk Management Plans now mandatory for large facilities

Key state-level requirements coming online in 2026:

• Virginia: mandatory reclaimed water use and "no net increase" clauses
• Arizona: new groundwater certificates almost impossible for hyperscale projects
• Ohio, Iowa, Texas, Georgia: new NPDES general permits specifically tailored to data centers
• California and Minnesota: mandatory public water-use dashboards for facilities >50 MW

Recent permitting outcomes that set 2026 precedents:

• Google Lancaster, Ohio: approved only after committing to 100% non-potable/reclaimed water
• Microsoft Mount Pleasant, Wisconsin: multi-year delay due to aquifer studies
• Meta Kansas City: required $500M+ water recycling investment to secure permits

All major hyperscalers have 2030 targets, but 2026 is the pivotal compliance year:

• Microsoft: water positive by 2030
• Google: net-positive water replenishment by 2030
• Meta and Amazon: aggressive WUE reduction plus offset programs

Technologies already in production and ready for 2026 projects:

• 95–99% on-site water recycling using reverse osmosis + crystallization
• Direct-to-chip and single-phase immersion cooling (reduces evaporative load 70–90%)
• Co-location adjacent to municipal wastewater treatment plants (fast-growing trend in Ohio, Iowa, Virginia)
• Atmospheric water generation systems now operating at scale in desert regions

Remaining challenges:

• Lack of fully standardized WUE and water-footprint reporting
• Limited disclosure from some operators
• Rapidly evolving state regulations creating compliance complexity