Stuttgart/Ingolstadt, Germany, 12. November 2026. Europe’s demand for data center capacity is growing rapidly. But the facilities require more than electricity and suitable sites. Depending on the cooling system, their water requirements can also be considerable, while their actual water footprint remains difficult to quantify. “Alongside electricity, water will increasingly determine where and how data centers can be operated economically and sustainably,” says Mathias Franke, Head of Data Center Consulting at Drees & Sommer. The incampus technology park in Ingolstadt, Germany, shows how energy efficiency, water management, and waste heat use can be considered as part of an integrated system.
The issue is becoming more pressing as governments seek to expand domestic computing capacity to support AI, digitalization, and economic competitiveness. By 2035, the European Commission aims to triple data center capacity across the EU.1 The UK government, meanwhile, forecasts that at least 6 GW of AI-capable data center capacity will be needed by 2030, around three times today’s level.2
As more facilities are developed, their resource requirements will increasingly need to be considered in the context of local conditions and availability. At the same time, hotter and drier conditions are increasing pressure on water resources in parts of Europe. Building the additional capacity Europe needs will therefore have to go hand in hand with responsible water and resource management.
The European Commission has therefore proposed a common EU-wide rating scheme for data centers to increase transparency around energy and water use. The scheme will cover individual data centers with a capacity above 500 kW, with the first sustainability labels expected in 2027. In parallel, the Commission is developing minimum performance standards for data centers operating in Europe.3
The proposed Cloud and AI Development Act also links support and simplified permitting to water-efficiency requirements.4 Yet any standard is only as good as the data behind it, and when it comes to water, that data is far from straightforward.
How much water do data centers actually use?
Despite growing reporting requirements, the actual water footprint of data centers remains difficult to quantify. Since 2024, European and national reporting obligations have aimed to improve transparency, with an EU database collecting energy and sustainability indicators from data centers subject to reporting requirements, including water use and Water Usage Effectiveness (WUE). However, the data covers only part of the market and reporting remains incomplete: according to the European Commission, preliminary figures indicate that only around 50% of data centers subject to the requirements had reported by 2026.5
Even where data is available, interpreting it is not straightforward. Water withdrawn at a site is not necessarily water consumed permanently and, depending on the cooling technology and local conditions, a portion of the water withdrawn may be returned to the environment or reused.
Current reporting on data center water consumption primarily covers on-site use. WUE does not account for indirect water demand associated with electricity generation or the production of IT hardware. According to International Energy Agency (IEA) estimates, data centers required more than 500 billion liters of water in 2023. Around 140 billion liters were used directly on site, while approximately 373 billion liters were linked to electricity generation.6 A data center’s water footprint can therefore extend far beyond the site itself and also depends on how the electricity it consumes is generated.
Water efficiency can also vary significantly depending on local climate conditions and cooling technology. Reported WUE values range from close to zero for some dry cooling systems to more than 2 liters per kilowatt-hour annually for evaporative systems.7 This limits the comparability of WUE figures and highlights the importance of considering local conditions and cooling systems when assessing water efficiency.
Cooling technology is one of the key factors behind these differences. Evaporative cooling can reduce electricity demand, but consumes water in the process. Dry cooling systems, by contrast, largely avoid water losses, but can require more electricity, particularly during periods of high temperatures. “There is no single best cooling solution,” says Mathias Franke. “What works depends on the local climate, water availability, electricity mix, load profile, and opportunities to use waste heat.”
incampus: Managing the Energy-Water Nexus in Practice
The incampus in Ingolstadt demonstrates how cooling, energy provision, and waste heat can be designed as an integrated system. Audi and the city administration of Ingolstadt have developed an innovative technology park on the 75-hectare site of a former refinery. Since residues in the soil can seep into the groundwater even now, the water is continuously pumped out and treated. This involves ten wells pumping up to 200 cubic meters of contaminated water per hour.
One distinctive feature of the project is to make productive use of groundwater already being extracted for site remediation by purifying it and using it for cooling. Because its base temperature remains largely constant throughout the year, the water can heat and cool the campus via heat exchangers. Groundwater and the technical heating and cooling systems run on separate circuits, and once treated, the water is allowed to seep back into the ground.
Unlike evaporative cooling systems, where water is lost during operation, the groundwater used here remains part of the local water cycle. While continuing to serve its original remediation purpose, it provides around 1.5 megawatts of heating and cooling capacity.
The data center, operating since 2022, is fully integrated into this site-wide energy system. Rather than being released unused, its waste heat is fed into a low-temperature network. Because data centers generate heat continuously while demand fluctuates, heat pumps and thermal storage units link generation and use.
Drees & Sommer provided commissioning management services to Audi and supported integration testing to ensure that the different components of the energy system work together reliably under varying operating conditions. This included the data center, pumps, heat exchangers, heat pumps, storage facilities, and the distribution network.
The incampus solution is shaped by its unique site conditions, but the principle behind it can be transferred more widely. The cooling system, the availability of water, the energy supply, and the use of waste heat: all these core parameters should be planned together from the start of a project and seen as components of an overall, integrated system.
Water as a Key Location Factor
International examples show how quickly water can turn from a planning detail into a risk in the approval process. In Belgium, the Walloon government rejected Google’s proposal to replace an approved air-cooling system with river-water cooling at a new data center in Farciennes, citing recurring droughts, water scarcity, and the need to protect regional water resources.8
As regulators look more closely at the local impact of data centers, decisions on cooling and water use are moving to the center of project planning.
“Local governments can set requirements for cooling systems or freshwater use through development plans and permits,” says Peter Junker, Associate Partner at Drees & Sommer, who advises data center operators and developers from feasibility studies through construction. “In the past, building plots, electricity, and fiber connections were the key location factors. Today, we also need to determine which cooling system is best suited to local water conditions, whether it will still be viable in ten or twenty years, and how waste heat can be put to productive use. This means looking beyond the site boundary and considering the wider availability and competing uses of water in the surrounding area.”
Sources
1. European Commission, Energy performance of data centres: Energy performance of data centres - Energy - European Commission
2. UK Government, UK Compute Roadmap: CP 1352 – UK Compute Roadmap
3. European Commission, Making data centres energy efficient thanks to a new EU rating system: Making data centres energy efficient thanks to a new EU rating system - European Commission
4. European Commission, Proposal for the Cloud and AI Development Act (CADA): Proposal for the Cloud and AI Development Act (CADA) | Shaping Europe’s digital future
5. Euronews, EU moves to curb energy and water for data centres: EU moves to curb energy and water for data centres | Euronews
6. International Energy Agency, Energy and AI: Energy and AI - IEA
7. Cooper, Andre; Nguyen, Thi Bang Tuyen, A Review of Thermal Management in Modern Data Centres: Water Usage Effectiveness and Heat Transfer Coefficients, Fluids, 2026: A Review of Thermal Management in Modern Data Centres: Water Usage Effectiveness and Heat Transfer Coefficients
8. Water News Europe, Belgium: Walloon minister blocks Google’s use of river water for data centre: Walloon minister blocks Google’s use of river water for data centre • Water News Europe