A data centre consumes water mainly because many cooling systems release heat by evaporating it. Take evaporation out of the design and the cooling no longer needs a steady supply of freshwater. There are three main routes: keep the water in a sealed loop and release heat to the air, use water that is not fit to drink, or combine both. The trade-off is that cooling without evaporation usually needs more electricity, especially on hot days.
Closing the loop
In a closed loop, the same water circulates again and again and is not evaporated. Liquid cooling at the chip suits this well. Microsoft, describing its own designs in December 2024, says that by adopting chip-level cooling solutions it can deliver precise temperature control without water evaporation, and that these liquid cooling technologies recycle water through a closed loop. It says the design saves more than 125 million litres of water per year per datacenter, while water is still used for ordinary needs such as kitchens and restrooms. It reports that new sites using the approach are expected online from late 2027.
Releasing heat to the air
Without evaporation, heat goes to the outside air through closed coils. The US Department of Energy's best practice guide, written by NREL, advises operators to reject as much remaining heat to dry coolers as possible, and notes that their effectiveness depends on the outside air temperature. Lawrence Berkeley National Laboratory's 2024 report describes air-cooled chillers as suited to situations where minimal on-site water consumption is crucial, and says dry coolers conserve water compared with evaporative cooling towers.
Using water nobody drinks
Where evaporation is kept, the water need not be drinking water. The Department of Energy lists reclaimed wastewater, harvested rainwater and condensate from air handling units as sources for cooling tower make-up, usually after treatment to non-potable standards.
| Route | Freshwater used for cooling | Main cost |
|---|---|---|
| Closed liquid loop with dry coolers | Little after the first fill | More electricity on hot days; new plumbing |
| Air-cooled chillers | Little on site | More electricity |
| Cooling tower on reclaimed or other non-drinking water | Little freshwater, though water is still evaporated | Treatment, supply agreements, pipework |
What is not certain
- Savings depend on climate. In hot places, dry cooling needs more electricity, and the water used to generate that electricity is not counted on site.
- Company figures describe the company's own designs and claims; they are not independent measurements.
- Whether reclaimed water is available, and under what rules, depends on the location.
Sources and method
- Microsoft, Sustainable by design: Next-generation datacenters consume zero water for cooling, Microsoft Cloud Blog, 9 December 2024. https://www.microsoft.com/en-us/microsoft-cloud/blog/2024/12/09/sustainable-by-design-next-generation-datacenters-consume-zero-water-for-cooling/
- Van Geet and Sickinger, NREL, for the US Department of Energy Federal Energy Management Program. Best Practices Guide for Energy-Efficient Data Center Design, revised July 2024. https://www.energy.gov/sites/default/files/2024-07/best-practice-guide-data-center-design_0.pdf
- Shehabi and others, Lawrence Berkeley National Laboratory, 2024 United States Data Center Energy Usage Report, 19 December 2024. Landing page https://eta-publications.lbl.gov/publications/2024-lbnl-data-center-energy-usage-report ; full text https://climate.mit.edu/sites/default/files/2025-02/lbnl-2024-united-states-data-center-energy-usage-report.pdf
- US Department of Energy, Federal Energy Management Program, Alternative Water Sources. Read 29 October 2026. https://www.energy.gov/femp/alternative-water-sources
Method: each link was opened on 29 October 2026 and every figure was taken from the page cited beside it. No figure was estimated.
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This article provides general information, not investment advice or an offer of securities.