Thirsty Data: When AI Meets Water Scarcity

Stuttgart/Ingolstadt, Germany, September 22, 2026. Germany is aiming to massively expand its data center capacity. But these facilities need more than just electricity and space. Depending on the cooling system, their water requirements can also be substantial. So far, it has only been possible to determine approximately how much they actually use. “In addition to electricity, water will also play a key role in determining where and how data centers can be operated economically and sustainably in the future,” commented Mathias Franke, head of data center consulting at Drees & Sommer SE, a company that provides advice on real estate, construction and infrastructure. The data center at incampus in the German city of Ingolstadt demonstrates how energy efficiency and waste heat recovery can be combined in an environmentally effective way:

Reports that are available from German data centers indicate that water use for the year 2024 is estimated at 1.85 billion liters.ⁱ However, it is not possible to determine the actual requirements for all facilities based on this information. The data provided only covers a share of the market. In addition, water used at a location is not automatically consumed permanently.

One thing is certain: demand for computing power is growing. The German government aims to at least double its national data center capacity by 2030. In the fields of artificial intelligence and high performance, computing power is expected to quadruple. This is laid down in the National Data Center Strategy published in March 2026.ⁱⁱ

There is still no comprehensive data on how much water data centers withdraw or use in total in Germany. Starting in 2024, however, European and national reporting requirements are expected to provide greater transparency. A European database has been tracking key energy and sustainability metrics for data centers subject to reporting requirements, including the use of water and the concept of water usage effectiveness (WUE). This metric measures a data center’s water efficiency by comparing the water used with the energy consumed by its IT technology. The lower the WUE, the less water a data center consumes in relation to the same IT load. However, only facilities above certain capacity thresholds are included, and complete reports have not been submitted by all member states.ⁱⁱⁱ

The 2025 reporting year illustrates just how patchy the dataset is in Germany. Based on the available monitoring data, 482 of the estimated around 1,000 German data centers subject to reporting had submitted the required information by the beginning of July 2025.^iv

Indirect Water Requirement Remains Visible

Current reporting data chiefly refers to the on-site water consumption of data centers. The water usage effectiveness (WUE) value does not reflect the indirect water requirement associated with electricity generation and the production of IT hardware. An estimate by the International Energy Agency (IEA) shows just how big this indirect portion alone can be. It bases its estimate on water requirements in 2023 exceeding 500 billion liters. According to the modeling, around 140 billion liters of that amount were attributable to direct operation of the equipment and approximately 373 billion liters to the provision of electricity.^v A data center’s water footprint thus extends far beyond its site. The level of the footprint also depends on the sources of electricity.

When Saving Electricity Can Cost Water 

Regulations focus primarily on electricity demand. Data centers that began or will begin operating on or after July 1, 2026, must achieve a PUE of 1.2 or lower. PUE is the ratio of a data center’s total annual energy consumption to the energy consumed by its IT load. Put simply, a PUE of 1.2 means that for every 100 kilowatt-hours (kWh) used by servers, storage systems, and network equipment, no more than 20 kWh may be used for cooling, power distribution, and other technical infrastructure. Operators are also legally required to recover a portion of the waste heat generated.^vi

A low PUE value indicates high energy efficiency. What may seem worthwhile from an energy efficiency viewpoint can have a negative impact on the water balance. Mathias Franke pointed out that “a data center with dry recooling has a lower water footprint than a system that uses evaporative cooling.” Systems based on evaporative cooling release heat using little electricity, but they do consume water. Dry recoolers largely prevent these losses but often require more electricity and larger recooling surfaces when outdoor temperatures are high. Which system is more environmentally effective therefore depends on the climate, the availability of water, the electricity mix, the load profile, and the ability to utilize waste heat.

Water Remains Difficult to Compare

To date, in Germany and at European level, there is no legally binding efficiency threshold for water consumption in data centers that would be comparable to energy efficiency requirements. Although operators subject to reporting requirements must provide information on water usage effectiveness and their water consumption, there is still no conclusive definition of what figures are considered sustainable and under what conditions.

This is because water is much more difficult to assess than energy. Whether a data center needs a lot of water or not is influenced by several factors, including the location, the climate, the cooling system, and where the water comes from. “One liter of drinking water in a dry region should be evaluated differently from an environmental viewpoint than one liter of treated wastewater or remediation water that is returned after heat exchange,“ explained the expert.

For this reason, the European Commission is working on the introduction of a mandatory EU-wide sustainability rating scheme and minimum requirements for data centers. The consultations will run until end 2027. Going forward, the EU intends to place greater emphasis on factors such as the water foot imprint, use of renewable energies and waste heat recovery, in addition to energy consumption. The mandatory sustainability labels across the two core metrics of power usage effectiveness (PUE) and water usage effectiveness (WUE) will be graded on a scale of A to G. 

The reporting obligations will apply to operators of data centers with an installed information technology power demand of at least 500 kW. However, member states are allowed to define lower limits.^vii The Cloud and AI Development Act (CADA) also links funding and simplified approvals to proof of water efficiency.^viii

Reporting Requirements instead of Sector Pact

With the Climate Neutral Data Centre Pact (CNDCP) more than 100 operators have voluntarily committed themselves to enhanced water efficiency. They represent around 85 percent of the overall computing capacity in Europe.^ix As of 2025, new data centers in regions that are both cool and dry may have a WUE of no more than 0.4 liters per kilowatt-hour if they use fresh water for cooling. In the case of existing facilities, this figure applies no later than when the cooling systems are replaced, by 2040. The range of published WUE figures extends from about 0.1 liters per kilowatt-hour in favorable locations to more than 1.5 liters in hot and dry regions.^x

Due to differences in calculation methods, however, comparisons only have limited information value. Whether a data center achieves its target value is also largely determined during the planning phase: dry recooling and closed-loop systems result in a very low figure. Evaporative systems require substantially more. Thus, the score reflects the selected type of cooling system.^xi In 2023, 64 operators presented their audit results. This corresponds to almost 75 percent of the European data center capacity.^xii However, in 2025, the Pact abandoned the audit requirement because of the new mandatory reporting provisions.^xiii

incampus: Groundwater Remediation and Waste Heat Recovery in Combination

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.

A particular approach: the groundwater, which is extracted anyhow for remediation of the site, is not only purified but also used for climatization purposes. Its base temperature remains largely constant throughout the year and is used to heat and cool the campus through heat exchangers. After the cleaning process, the water is allowed to seep back into the ground. There are separate circuits for groundwater and technical heating and cooling systems. The data center is integrated into this site-wide energy system and additionally feeds its waste heat into the low-temperature network.

With regard to the water balance, this is a key difference from evaporation-based cooling systems: the water is used for heating but is not lost. Approximately 1.5 megawatts of heating and cooling capacity are generated from a water flow that must be pumped anyway for remediation of the site^.xiv

The data center of the campus has been operating since 2022. Its waste heat is not simply released into the environment without being used but is integrated into the site-wide energy system. Since data centers continuously generate heat, but requirements fluctuate, heat generation and utilization are linked through a low-temperature network, heat pumps, and thermal storage units.^{xv xvi}

Drees & Sommer has provided commission management services to Audi. The company’s expert teams have also been involved in integration tests ensuring full system functionality during changing operating scenarios. Testing included the data center, pumps, heat exchangers, heat pumps, storage facilities and the distribution network function.^xvii

The incampus differs to some extent from other locations. Nonetheless, the approach applies to other projects. The cooling system, the availability of water, the energy supply and the use of waste heat – all core parameters should be planned together from the start of a project and seen as components of an overall, integrated system.

Water as a Critical Location Factor

The pressure to act is increasing. With rising temperatures, the availability of water is becoming a critical risk factor for data centers. Heat raises the cooling load, while periods of drought can lead to scarcity of water and local water withdrawal restrictions. Analyses show that many major data centers operate in places facing elevated chronic heat or drought stress.^xviii

International examples also show how quickly water can go from being a planning detail to a risk in the approval process. In the US state of New York, state environmental permits for new data centers have been temporarily suspended in order to develop a uniform framework regarding the impact on water, energy and the environment for reviewing them. Google planned to build a data center in the Walloon municipality of Farciennes and wanted to replace the originally approved air-cooling system with water cooling using water from the Sambre River. The regional government rejected the project, inter alia because of acute water shortages, periods of drought and the need to preserve water resources.^xix

While these cases cannot be directly applied to Germany, they do show that authorities are increasingly assessing data centers based on their impact on the entire region. Mathias Franke’s colleague, Peter Junker, explained: “Through development plans or permits, local governments can establish requirements for the cooling of data centers or the use of fresh water, for example,” The graduate electrical engineer and associate partner at Drees & Sommer has provided advice to numerous data center operators and project developers, from feasibility studies to risk analyses through site development to the planning and construction of data centers. „In former times, building plots, electricity and fiber connection used to be key location factors. Today, it is necessary to determine which cooling system is best suited to the local water conditions, whether it will still be viable in ten or twenty years, and whether there is a market for the waste heat,“ Peter Junker added.