Data centers have become more common in Arizona; the Valley is one of the biggest markets for them in the country. But data centers often need water, which in some cases, is in shorter supply here. So, how does that impact this industry in Maricopa County?
Brett Walton, a reporter for Circle of Blue, a nonprofit news agency reporting on water issues, has written about this and joined The Show to discuss why it is that data centers require water.
Full conversation
BRETT WALTON: Data centers are the backbone of the modern internet. They process all of the streaming and our banking and our photo storage in the cloud, the Zoom call that we are on right now, it all runs through data centers and to power all that, the chips that are in the data centers and the servers produce quite a bit of heat.
And the heat needs to be ejected from the data centers in order for them to run well. So what we have is a physics problem, and data centers have to consider how to eject that heat. They can do it in a number of ways, including air and water, the main two. And so that's where the water comes in is that it's part of this heat rejection process.
MARK BRODIE: And it seems as though the Phoenix area is a pretty big place, pretty popular place for computing companies to put these data centers. Is that a fair assessment?
WALTON: It is. Arizona, particularly the Phoenix area, is one of the top markets in the U.S. The metrics vary on how these things are ranked, but one of the four to eight biggest markets in the country, not as large as northern Virginia, which is the biggest market, but it's certainly one of the top markets.
BRODIE: So how are those companies trying to navigate their water needs in a desert, which, you know, in some ways is experiencing water shortages?
WALTON: Right. Water is one of those things that you hear talked about in tandem with energy for data centers as one of the big environmental constraints that they need both to operate. And the narrative has been data centers using enormous amounts of water, so when I started looking into the story, I was pleased to find that there are options out there, and it seems that water use is a choice by companies for their data centers.
There are trade-offs involved, but data centers do not necessarily have to consume a lot of water. In fact, some in the Phoenix area don't consume any, or just marginal amounts. So there are ways, new technologies, new equipment that make cooling solutions available that do not use water.
So, in a water stressed area like central Arizona, that is an important factor. When companies build these data centers, they're looking at the location and the constraints in that particular location. So, in Arizona, zero water cooling, cooling solutions that do not consume water are becoming more popular.
BRODIE: Yeah, I was gonna ask if a company does not use water in a place like Arizona, does that mean that they're using more energy than they might otherwise?
WALTON: Yes, that is the trade-off. It's that zero water solutions do require a bit more energy, and energy itself is part of this water equation. There was a report from Berkeley Lab in December that at a national level looked at water and energy demands for data centers and the water needs from energy far outpace the direct water use in the data centers.
BRODIE: Are companies able to try to mitigate that also because it seems as though if they're going to maybe a more energy intensive cooling strategy in an effort to save water, but the production of that energy also requires water and maybe more water than it would take to cool the data center, that seems like a net negative for water anyway.
WALTON: It's a balancing act, so companies are looking at this and saying, what is the bigger constraint on my operations? Is it water in this area? Is it energy in this area? Where does my energy come from? The more environmentally focused companies, some like Microsoft are looking to use renewable energy or source carbon-free energy to operate the data centers, and some of that water calculation can go into that.
But the important thing to remember is that you know, there's water for direct operations and water indirectly via the energy, and both of these things are like a push and pull, because using more of one will often mean using less of another and vice versa.
BRODIE: Right. Is there any talk of trying to use other sources of water like either using recycled water or reclaimed water or something like that?
WALTON: There is, yes, companies have, in addition to putting in more efficient equipment, are looking at alternative water sources that don't put as much of a demand on potable water. So reclaimed water is one option: recycled water, rainwater harvesting, maybe not as much in Arizona, but in other locations that's an option. And then there are these zero water cooling technologies that are being rolled out in central Arizona by companies like Microsoft and CyrusOne.
BRODIE: One of the things that you reported that I thought was really interesting is how individual cities are taking sort of looking at their own rules and regulations for data centers that are housed within their municipalities. How, how are you seeing Arizona cities specifically trying to say, OK, we want this, we don't want that, if you're gonna do it, here's how you have to do it, that kind of thing?
WALTON: Right, so with data centers in aggregate, if we look at high level numbers, they don't use all that much water compared to other uses, say, agriculture industry, but individual utilities might have quite a problem if they have one large user suddenly come into their service area. Some communities in Arizona have initiated municipal ordinances or other restrictions on water use to preserve their supply.
Marana near Tucson put in an ordinance in December that said no, this city would not provide potable water to a data center. There are none operating in the city right now, but that's forward looking to preserve their potable water for residential uses. Then others like Chandler have an ordinance and a couple of different ways that regulate sighting and water use by data centers to make sure that the data centers are not too much of a strain on the city supply.
BRODIE: Do the companies building these data centers seem upset by those regulations, or are they things that they can work with?
WALTON: The things they can work with. So in Chandler, which has one of the the guardrails against excessive water use, CyrusOne is one of the data center companies that operates in Chandler, and they implemented a zero water cooling for their data center complex in Chandler. So it's one of those things where you take a factor into your analysis and you can work around it if you have to.
BRODIE: Is it safe to say that given the seemingly never ending increase in computing, and especially with AI becoming more and more prevalent, that data centers like we're going to continue to need more of them, not fewer?
WALTON: Right, the trend is upward, certainly upward. I alluded to the Berkeley Lab report from December, this high level national look at where energy and water use for data centers is going. And today, on the energy side, they estimate the data centers account for about 4.4% of total U.S. electricity use. So all the electricity use in the US, 4.4% goes to data centers, and they think that it might rise by 2028, so just three years from now, to between 6% and 12% of total U.S. electricity use.
So these are a big portion, data centers are a big portion of U.S. energy demand. The water demands often rise in tandem with the energy demands, but again, it's a choice. So, in water scarce areas there are these options now for reducing water use for data centers.
