When engaged in the site selection process for a proposed data center, water due diligence is far more complicated than merely figuring out whether a utility line reaches the site. Developers need to understand seasonal supply reliability, drought restrictions, competing users, water quality of the available water sources, wastewater discharge limits, and the treatment burden created by each cooling option.
Reclaimed water may look attractive until silica, ammonia, and biological variability raise pretreatment costs.
Potable water may be available today but politically fragile tomorrow.
Where is the water coming from? Part of the due diligence effort involves a water sourcing study. The water sourcing study should capture the capabilities, usability, and proximity of groundwater, surface water bodies, and municipal utility connections. Water rights issues and estimates on CAPEX for each source should also be part of detailed due diligence efforts.
One thing often overlooked, however, is atmospheric capture—not the same thing as a rainwater harvesting pond. Atmospheric capture is the collection of water from moisture in the air, i.e., humidity. In humid climes, this can be significant.
The strongest projects test multiple operating scenarios—average year, drought year, heat wave, and grid stress—and ask whether the strategy remains defensible as AI-driven demand grows. In many cases, and especially as new sites are popping up, it will likely take multiple sources to meet the demand of industry while also achieving stated ESG and water stewardship goals.
References:
LANL. (2024). Reclaimed water case study for mission-critical facilities. Los Alamos National Laboratory. https://www.osti.gov/biblio/2433993
Lei, N., Lu, J., Shehabi, A., & Masanet, E. (2025). The water use of data center workloads: A review and assessment of key determinants. Resources, Conservation and Recycling, 219, 108310. https://doi.org/10.1016/j.resconrec.2025.108310
Shehabi, A., et al. (2024). United States data center energy usage report. Lawrence Berkeley National Laboratory. https://eta-publications.lbl.gov/sites/default/files/2024-12/lbnl-2024-united-states-data-center-energy-usage-report_1.pdf
Siddik, M. A. B., Shehabi, A., & Marston, L. (2021). The environmental footprint of data centers in the United States. Environmental Research Letters, 16(6), 064017. https://doi.org/10.1088/1748-9326/abfba1
UNESCO. (2024). The United Nations world water development report 2024: Water for prosperity and peace. UNESCO. https://www.unwater.org/publications/un-world-water-development-report-2024