In most data centre cooling, yes. Evaporating water is a very efficient way to move heat, so systems that use it need less electricity. Systems that avoid evaporation save water but need more electricity, especially in hot weather. Neither choice is right everywhere. The sensible test is to look at energy and water together, in the climate where the data centre sits.
What the evidence says
Lawrence Berkeley National Laboratory's 2024 report on US data centres says water-cooled chillers and other evaporation-based cooling systems are generally more energy efficient than an air-cooled chiller or other waterless systems, and that while air-cooled chillers use no water, they use more energy. It sums up: in many cases, there are tradeoffs between low PUEs and low site WUEs. Microsoft, describing its move to designs without evaporative cooling, says the change will increase its power usage effectiveness, PUE, and calls the result a nominal increase in annual energy use.
Two measures, read together
PUE compares the total energy of the facility with the energy of the computers; closer to 1 means less energy spent on cooling and other overheads. The US Department of Energy notes that data centres with average energy efficiency have a PUE of 2.0, while highly efficient ones approach the theoretical minimum of 1.0. WUE compares the water used on site with the energy of the computers, in litres per kWh. A design can look excellent on one measure and poor on the other, so a single headline number can mislead.
| Cooling choice | Electricity for cooling | Water used on site |
|---|---|---|
| Cooling tower with water-cooled chillers | Lower | Higher, through evaporation |
| Free cooling through a cooling tower | Very low when the weather allows | High, like all evaporative systems |
| Air-cooled chillers or dry coolers | Higher, especially in hot weather | Little |
| Closed liquid loop at the chip with dry coolers | Moderate; liquid moves heat efficiently | Little |
Climate decides the balance
Cool climates allow free cooling with outside air for many hours, which saves both energy and water. In hot and dry places, evaporation saves the most electricity but water is often scarce. In hot and humid places, evaporation works less well. The best design for one site can be the wrong one for another, and the water used to generate the extra electricity belongs in the comparison too.
What is not certain
- The size of the trade-off depends on the design, the climate and the electricity supply; the table shows directions, not measured values.
- Off-site water used to generate electricity is often left out of on-site figures, which can make waterless designs look better or worse than they are.
Sources and method
- 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
- 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/
- US Department of Energy, Federal Energy Management Program, Cooling Water Efficiency Opportunities for Federal Data Centers, published 9 January 2019, updated 28 April 2026. https://www.energy.gov/cmei/femp/cooling-water-efficiency-opportunities-federal-data-centers
- 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
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.