The Rise of the Data Centre: A Global View
The physical infrastructure supporting our digital lives – the massive server halls, cooling systems, networks and power supplies collectively known as data centres – is undergoing a rapid transformation. As demand for cloud computing, artificial intelligence, streaming, and real-time digital services grows, so does the footprint of the data centre sector. According to recent estimates, data centres globally account for a significant portion of electricity consumption (for example, one summary states that the UK’s data-centre sector consumed around 2.5% of UK electricity in 2024) and are projected to grow substantially by 2030. (House of Commons Library)
Beyond energy, these centres increasingly generate large volumes of heat and require ever-more sophisticated cooling and resource management. They are no longer simply “warehouses of servers” but are becoming part of the energy and resource systems of the regions in which they are located. (policy.friendsoftheearth.uk)
Given the scale of investment (for example, the UK is seeing multi-billion-pound data-centre projects) and the fact that they are becoming a critical part of national infrastructure, the question shifts from “can we build more capacity?” to “how do we build it sustainably, and where?” (Reuters)
Nordic Innovation: Turning Waste Heat Into Urban Warmth
In some of the world’s coldest climates, there is a striking example of symbiosis between high-tech infrastructure and urban energy systems. In Finland (and to some extent Sweden), large data centre developments are being paired with district heating networks, so that the abundant waste heat from server operations is captured and used to heat homes and businesses. One Bloomberg feature reports: “In Finland and Sweden, waste heat from data centres is being captured and reused to warm homes via district‐heating systems.” (Bloomberg)
For instance, a 2019 data-centre build in Helsinki by Telia Company has since (since 2022) channelled its waste heat into heating over 20,000 dwellings. (CIBSE)
The mechanism is not trivial: cooling systems raise water temperatures (via heat pumps) to a district-heating network return line at 60-70 °C or more. (CIBSE)
This paradigm offers a dual benefit: (1) it reduces the carbon footprint of heating homes (especially in cold climates) and (2) it gives a productive use to what would otherwise be waste heat. The Nordics, with their cold climate, high heating demand, and existing district-heating infrastructure, are especially well-suited. But the principle may have broader relevance.
Water Use in the United States: A Hidden Constraint
In contrast to the “waste-heat-used” story, another major environmental pressure of data-centre growth is water consumption, especially in the U.S., where many centres are built in water-stressed regions. A report by the Environmental and Energy Study Institute (EESI) estimated that U.S. data centres consume about 163.7 billion gallons annually (around 449 million gallons per day) as of 2021. (Environmental and Energy Study Institute)
More recently, researchers warn that U.S. data-centre water demand could reach levels comparable to the annual water use of 10 million Americans. (Yale E360)
Water use takes three main forms: direct cooling (evaporative or water-based systems), indirect water from power generation, and water embedded in chip manufacturing. (Environmental and Energy Study Institute)
In regions such as Northern Virginia (sometimes called “data-centre alley”), over 300 operational data centres reportedly consumed close to 2 billion gallons of water in 2023 – a 63% increase since 2019. (Environmental and Energy Study Institute)
A more recent in-depth analysis warns that as the AI-driven data-centre build-out continues, water-stress exposure is emerging as a material risk for location decisions. (S&P Global)
There is also social and environmental friction: in drought-prone areas, data-centre water use competes with municipal supply, agriculture, ecosystems and local communities. The transparency of water usage by large operators is often weak. (Business Insider)
Bringing It Home: The UK Context
Turning attention to the UK, we find the situation is both promising and cautionary. On the positive side, the UK government has committed funding to projects that recover waste heat from data centres and channel it into district-heating networks. For example: five green-heating projects awarded nearly £65 million support will deliver net-zero heat via waste heat from data centres to more than 10,000 homes in one scheme. (GOV.UK)
On the regulatory front, data centres in the UK were designated as “Critical National Infrastructure” in September 2024, underlining their strategic importance. (Reuters)
However, when it comes to water, the warning lights are flashing. A government-commissioned report on water use in AI and data centres warns that the UK already faces a projected daily water deficit of nearly 5 billion litres by 2050, and that current national water resource plans do not adequately take into account the burgeoning demand from infrastructure such as data centres. (GOV.UK)
A recent TechUK survey of 80 commercial data-centre sites across England found encouraging signs: 51% use waterless cooling, 64% consume less than 10,000 m³ of water annually, and 89% either measure water use or use systems that don’t require water for cooling. (TechUK)
Still, the UK Parliament’s research briefing flags that many data centres rely on water-based cooling and that water consumption remains a concern — especially given the country’s growing heat-wave/drought risk. (House of Commons Library)
Community and ecological concerns are material: in the drier east and southeast of England, water supply regions are facing stress; for example a water company raised concerns about data-centre location due to scarcity. (Shakespeare Martineau)
Lessons & Implications: What Should the UK Do?
From this global tour — Scandinavia, the U.S., the UK — several lessons emerge for policy-makers, planners and industry participants in the UK and beyond:
- Design for circularity from the start
- The Nordic example shows that if data-centre sites are selected close to existing heating infrastructure (or potential heat users), then the waste-heat stream can become a valuable asset, not a liability. In the UK, placing new data centres near urban district-heating networks — or designing networks in tandem — could unlock win-win outcomes (lower carbon emissions + lower operating cost) rather than seeing data centres solely as resource burdens.
- Water strategy must be integrated into planning
- As the U.S. experience demonstrates, locating data centres in water-stressed regions without robust mitigation drives risk: to water supplies, to community relations, to corporate licence to operate. In the UK, where future water shortfalls are projected, data-centre development must be aligned with water-resource planning — encompassing cooling technology choice (air vs water-based), use of non-potable or recycled water, and real-time metering and transparency.
- Technology choices matter
- Cooling architecture (air-based, refrigerant, liquid immersion) significantly affects water usage, energy consumption and potential for heat reuse. UK-based operators should increasingly favour low-water or closed-loop systems. The TechUK survey indicates many sites are already moving in that direction. But growth of AI and increased density means future systems must be climate-resilient.
- Transparency and data are crucial
- One part of the problem is that many data-centre operators do not publicly report water usage, nor are water regulators always able to capture this demand. The UK would benefit from mandatory or standardised reporting of water and heat-release metrics for data centres over a certain power threshold. This transparency underpins planning, community trust and sustainable development.
- Planning policy and regional strategy must catch up
- The UK’s planning system is evolving (e.g., changes to the National Planning Policy Framework and new infrastructure regimes). But there remains tension: the drive for rapid expansion of data-centre capacity (especially for AI) may outpace infrastructure (grid, water, heat network) and may strain local ecosystems. A strategic, regional approach is needed — one that treats data-centres as part of the wider resource landscape (energy, water, heat) rather than isolated digital boxes.
Conclusion
The growth of data-centre infrastructure is not simply a technological story: it is a story about energy, water, heat, communities, and place. The Nordic experience offers an instructive model for converting waste into value; the U.S. experience warns of unintended consequences when resource constraints are ignored; and the UK stands at a critical juncture. If policy-makers, planners and industry align around sustainable location, cooling design, resource transparency and heat-reuse, then data centres can become anchor elements of low-carbon infrastructure rather than new drains on resources. For a UK that aspires to both digital leadership and environmental integrity, the challenge is to make sure that the cloud doesn’t come at the cost of the groundwater — or the climate. Don't get me started on artificial intelligence and how that boom will bust the grid and the banks of the rivers.