The data centre industry continues to boom, bringing with it mass debate over its water and energy use.
It is often perceived that these facilities are disruptive, particularly as AI demand surges. Critics of the industry have argued that data centres put strain on local resources, lead to increased greenhouse gas emissions and are thirsty for power, energy and water.
However, those working within the industry have been quick to dispel anxieties in the wake of recent news coverage and the National Drought Group in the UK suggesting that deleting old emails could help reduce national water use.
Lennox Data Centre Solutions CEO Matt Evans even told Capacity this week that these arguments oversimplify complexities within the industry, particularly when it comes to sustainability.
“Data centres are an easy target because they’re mysterious. People don’t really know what goes on inside,” he said. “Most data centres in the UK don’t actually use water as a primary cooling method. Nearly two-thirds don’t use water at all.”
Tackling bad publicity
It is no secret that data centres are often exposed to negative publicity, with David Knox, global director of energy and sustainability at Colt DCS explaining that “perceptions around water usage” in particular “have often been overstated when it comes to modern facilities”.
As AI continues to boom and impact the global technology industry, data centres require a lot more water and energy to run these complex digital systems without overheating. However, the industry is migrating towards more efficient systems, including the use of closed-loop water systems with continuous recycling and no waste.
“Our data centres use closed-loop systems where water is continuously recycled, reduced and reused – meaning there is no waste,” Knox said, speaking on Colt DCS. “Heat is removed through efficient cooling methodologies, and where possible, this heat is recovered and repurposed for use by local communities.”
JLL’s Director and head of EMEA data centre research, Daniel Thorpe, explained: “People perceive modern data centres to be voracious energy consumers and therefore wholly negative, but they are essential infrastructure for our modern digital world and have made significant efficiency improvements in recent years.”
In fact, Thrope states that a data centre’s Power Usage Effectiveness (PUE) would have been anywhere from 2.5 to 3.5 and in some cases as high as eight, 15 years ago. Now, the average data centre PUE in Europe sits around 1.5 to 1.6.
“While the construction of these facilities requires energy and resources, advancements in design and operation mean modern data centres are far more efficient than their predecessors,” he added.
This comes as techUK’s recent report, Understanding Data Centre Water Use in England, sought to dispel debates over how data centres use water. It found that 51% of surveyed data centres are using waterless cooling systems and, thanks to closed-loop systems, 89% of operators measure water use, or do not need to.
It highlighted that the industry does actively seek to minimise water use through smart design and cooling choices specifically to minimise environmental impact. Yet, it does acknowledge that there is room for progress.
Knox added: “While it’s great that the industry is becoming more understood, to achieve the UK’s goal of becoming a key player in the AI and cloud technology landscape, there is much more that needs to be done.”
A new tech frontier
Regardless of the hype, data centres remain a critical backbone for digital infrastructure – and even more so since AI exploded into the public consciousness. These facilities are essential for providing the infrastructure that AI needs, in addition to supporting governments in their digital innovation endeavours.
This was particularly the case for the UK, which ended up classing data centres as critical national infrastructure (CNI) in 2024.
Now, the industry is looking to support the next generation of technology – with the next major leap being quantum computing – which requires more specialised facilities. According to JLL, quantum investments could reach US$10 billion annually as soon as 2027 and $20 billion by 2030, which presents a significant opportunity for real estate investors and developers to engage with data centres for the first time.
Thorpe explained: “Data centres have so far primarily been focused on AI, but quantum computing demands highly specialised, purpose-built research facilities with extreme environmental controls, creating a distinct new real estate niche.
“The benefits and uses of quantum computing are vast, and demand will come from across sectors, including the pharmaceutical industry, with quantum simulations having the ability to predict how medicine interacts with diseases and shorten the test phase of new vaccines.
“The current data centre boom is just the beginning of a wider growth in infrastructure to fuel this new technology. The challenge, however, will be to ensure the infrastructure is sustainable and runs efficiently.”
Finding progressive sustainable solutions
Despite the data centre industry having achieved great progress, leaders do appreciate that efficiency and sustainability need prioritising further.
Currently, there are grid capacity bottlenecks, meaning that infrastructure upgrades aren’t always keeping pace with demand. This inevitably creates connection delays that risk stalling digital investments and pushing up carbon emissions.
In response, techUK called for “urgent collaboration” in its report between government, regulators and the data centre industry to ensure that the industry is both innovating successfully and in a sustainable way.
“Data centres will be central to delivering our AI and innovation ambitions,” said Matthew Evans, director of markets and COO at techUK. “But as demand for compute grows, we must plan ahead. We need smart policies, resilient infrastructure and stronger data to ensure digital and environmental resilience go hand in hand.”
A crucial part of positive data centre growth is ensuring improved access to renewable energy. Knox argues that this is essential in ensuring the data centre industry can meet rising demands in a way that is more environmentally conscious.
“To leverage the wealth of wind, solar and hydroelectric energy available in the market, national grids need to be optimised to transfer this power from where it’s produced to where it’s needed,” he concluded. “Data centre facilities require uninterrupted power supplies, with demand growing faster than electricity infrastructure upgrades.
“In areas already nearing grid capacity, delays to connection timelines risk creating bottlenecks that stall billions in digital investment.”
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Datacloud Energy 2026
After a standout 2025 edition, we’re back with an even sharper focus on the intersection of data centres, energy, and ESG. As power demand rises and regulations evolve, there’s a growing urgency to rethink how infrastructure is powered, financed, and built for long-term impact.
