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How Data Center Construction Affects Local Water and Power Supplies

Data centers can use water for cooling and add large electricity loads. Learn how direct and indirect water use differ, what national estimates mean, and how to assess a local proposal.

By Bettesworth Construction Team 9 min read
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A data center can add substantial, often continuous electricity demand to the local grid and may use water on site for cooling. Its electricity supply can also have an indirect water footprint at power plants. The effects on a particular community depend on the facility’s size and operating profile, cooling design, water source, local utility and water-system capacity, regional electricity mix, and how infrastructure costs are assigned. National estimates show the scale of the issue, but cannot predict what an unspecified project will mean for a specific town.

How a data center affects water and electricity

There are two distinct water pathways to consider. A facility can draw water for cooling and other on-site needs. Separately, generating the electricity a data center consumes can use water, creating an indirect water footprint even when the facility itself uses little or no water for cooling. These figures describe different parts of the system; adding them together without checking definitions can mislead.

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Electricity demand also has more than one dimension. Annual energy use, usually expressed in kilowatt-hours or terawatt-hours, describes how much electricity is consumed over time. Peak load describes the highest demand the grid must serve. A large load that runs steadily can pose a different planning challenge from the same annual energy use concentrated in shorter periods. The connection’s timing, location, and required capacity therefore matter alongside the annual total.

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On-site water use

Cooling design, local weather, facility type, and operating assumptions affect how much water a site uses. The relevant number is not just a yearly total: seasonal demand can matter to a community whose water system is more constrained during particular months. A proposal should distinguish water withdrawn from a source from water consumed. Withdrawal is water taken from a supply; consumption is water not returned to the immediate water cycle, for example because it evaporates. A system may withdraw water and return some of it, so the two measures are not interchangeable.

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Ask how the cooling system works, what water source it uses, whether water is recirculated, what happens to any discharge, and what withdrawals and consumption are projected by season. A water-use figure without the cooling design, source, operating conditions, and withdrawal-versus-consumption definition is difficult to interpret.

Water associated with electricity generation

Power plants can consume water while generating electricity. The amount associated with a data center’s electricity depends partly on the generation mix serving that load and the efficiency and water practices of the power plants involved. It is therefore not a fixed property of a data center or a universal conversion factor for every town.

Lawrence Berkeley National Laboratory (LBNL) estimated that U.S. data centers’ electricity use in 2023 was associated with nearly 800 billion liters of indirect water consumption. Its estimate used regional grid mixes; it was not a direct reading from facility water meters. LBNL said the underlying data did not allow it to incorporate facility-level power-purchase agreements or behind-the-meter generation. The estimate is useful for understanding a national-scale pathway, not for attributing a precise water impact to an individual site.

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How much electricity do data centers use?

LBNL’s 2024 report estimated that U.S. data centers consumed approximately 176 terawatt-hours (TWh) of electricity in 2023. That is a modeled national estimate, not a sum of meter readings published for every facility. In a June 2026 update, LBNL estimated that data centers could account for 11.8% of total U.S. electricity use in 2030 in its reference case. The update’s scenarios ranged from 9.5% to 15.3%; its compounded uncertainty bounds for data-center electricity use were 521–843 TWh in 2030.

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The forecast reflects modeling of equipment shipments and per-device electricity use, cooling performance, facility types, and locations. It is a scenario-based outlook, not a guaranteed outcome or a prediction for a particular utility territory. Treat the reference case as one modeled path and the range as a reminder that future demand is uncertain.

Measure Estimate What it represents
U.S. data-center electricity use in 2023 Approximately 176 TWh LBNL’s 2024 national estimate
Indirect water consumption associated with U.S. data-center electricity in 2023 Nearly 800 billion liters LBNL’s 2024 modeled estimate using regional grid mixes, not facility water-meter readings
Average indirect water consumption per kWh of data-center electricity in 2023 4.52 liters per kWh LBNL’s 2024 U.S. average for data-center electricity; its comparison for average U.S. electricity use overall was 4.35 liters per kWh
Share of total U.S. electricity use in 2030 11.8% reference case; 9.5%–15.3% scenarios LBNL’s June 2026 modeled estimate; compounded uncertainty bounds for data-center use were 521–843 TWh

The 4.52-liter figure is an average associated with electricity generation, not the amount a data center withdraws on site for each kilowatt-hour. It should not be applied as a site-specific water estimate without accounting for the facility’s actual electricity supply and the method used to represent it.

Will a new data center strain the local power grid?

It may require new or upgraded infrastructure, but the national estimates alone do not establish whether a specific project will strain a particular grid. The answer depends on the local network’s available capacity, the size and timing of the proposed load, interconnection requirements, regional generation and transmission, and how utilities plan for reliability. The U.S. Department of Energy (DOE) notes that data-center electricity demand is growing rapidly and varies by region; these facilities often need firm power continuously.

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Grid effects are not limited to the amount of energy consumed. A utility must understand when a facility will connect, how quickly its demand will ramp up, what peak load it expects, and whether the local transmission and distribution systems can serve it. A large, steady load may affect planning differently from a flexible load that can reduce demand at certain times. Neither the presence of a large project nor a national growth forecast, by itself, proves that outages will occur or household bills will rise.

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Capacity, interconnection, and upgrades

Interconnection is the process of connecting a new load to the electricity system. A project may trigger questions about available capacity or the need for transmission or distribution upgrades. LBNL identifies large-load interconnection, grid planning, tariffs, and cost allocation as matters for utilities, states, and regulators to address. A community should look for the utility’s dated capacity and interconnection assessment, the upgrades identified, the project schedule, and the analysis of how the system will remain reliable.

Cost allocation deserves its own scrutiny. Ask which infrastructure improvements are required for the project, how the utility proposes to recover their costs, and whether the tariff or other cost-allocation approach assigns costs to the project, other customers, or a combination. The answer should come from the applicable utility planning and regulatory documents, not from a general assumption that new demand automatically does—or does not—affect other customers.

Possible system responses

DOE identifies several possible responses to growing data-center demand: expanding the grid, making better use of existing infrastructure, adding storage or clean generation, improving efficiency, planning ahead, using appropriate tariffs, and encouraging demand-side flexibility. These are options, not proof that a particular utility has adopted them or that they will be sufficient for a particular project. Ask which measures are actually proposed, approved, funded, and scheduled, and how they relate to the facility’s expected load.

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What determines a project’s local water impact?

A defensible local assessment needs project-specific information rather than a national average alone. The cooling system and local water source shape on-site use; local utility data show the context in which that demand would be served. Electricity-related water estimates require the regional generation assumptions used for the facility’s power. A claim that a project is matched to a particular source of electricity should therefore make its assumptions and accounting method clear.

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  • Facility and operating profile: projected peak and annual electricity use, operating pattern, facility type, and ramp-up schedule.
  • Cooling and water: proposed cooling design; water source; withdrawals and consumption reported separately; seasonal demand; recirculation and discharge arrangements.
  • Local water-system context: the provider’s dated information on system capacity and the conditions under which it expects to serve the project.
  • Electricity supply: the regional generation mix and the assumptions used in any indirect-water estimate or claim about a particular generation source.
  • Grid connection and cost: utility capacity and interconnection findings, required upgrades, planning assumptions, tariff treatment, and cost allocation.
  • Evidence quality and status: whether figures are measured or modeled; their date, geography, assumptions, and scenario range; and whether the project is proposed, approved, under construction, or operating.

Use these same categories when comparing proposals. Two projects cannot be compared fairly if one reports peak demand and the other only annual energy, or if one reports water withdrawals while the other reports consumption. Record each figure’s unit, time period, geography, and source, and label estimates as modeled where appropriate.

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What can communities ask before a data center is built?

Residents, local officials, and reporters can request the documents that connect a project’s projections to the capacity of local systems. Direct questions to both the developer and the relevant utility or water provider; one party’s estimate may not answer the other’s operational or planning questions.

  1. Request the load forecast: What are the projected peak demand and annual electricity use? When will the facility connect, and what ramp-up schedule does the forecast assume?
  2. Request the water plan: What cooling design and water source are proposed? What are the projected withdrawals and consumption by season, and what water is recirculated or discharged?
  3. Ask the utility for its assessment: What capacity and interconnection review has been completed? Does the utility identify transmission or distribution upgrades, and what are their timing and cost-allocation arrangements?
  4. Check the assumptions behind power claims: If the developer says electricity is matched to a particular generation source, what does “matched” mean, what data support it, and how is the claim reflected in any indirect-water estimate?
  5. Compare the evidence: Are the figures measured at an operating facility or modeled for a proposed one? What date, location, operating assumptions, and scenario range apply?
  6. Confirm project status: Is the proposal still under review, formally approved, under construction, or already operating? Use dated public documents and distinguish plans from completed work.

Construction status and operating status should not be blurred. A planned facility’s forecast is not a record of actual water use or electricity consumption. For a project already operating, facility and utility records can help test forecasts against observed conditions; for a proposal, the assessment necessarily depends more on stated assumptions and planning documents.

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How to interpret cooling proposals and emerging approaches

A novel cooling concept is not automatically a proven solution. In August 2024, DOE described a proposed feasibility test in Virginia for a water-circulation system that would use water from abandoned underground mines to cool a data center. DOE’s notice described a proposal to test feasibility; it did not establish completed performance, commercial availability, or suitability for other locations. Communities evaluating a similar claim should ask for results from the relevant project and evidence that the approach fits local conditions rather than treating a feasibility proposal as an operating demonstration.

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More generally, compare cooling proposals by asking what resource they use, how much water they withdraw and consume under local seasonal conditions, and what the system returns or discharges. Do not infer that all facilities use the same amount of water, or that a cooling method described for one location will work the same way elsewhere.

What national figures can—and cannot—tell a community

National statistics establish that data-center electricity use and its associated indirect water consumption are material at scale. They do not determine the impact of a proposed building in a named town. LBNL’s 2023 indirect-water estimate relied on regional grid mixes and could not incorporate facility-level power-purchase agreements or behind-the-meter generation because facility-level data were unavailable. Its 2030 outlook is a model with reference, sensitivity, and uncertainty scenarios. DOE’s discussion of possible system responses likewise does not show which response has been adopted for an unspecified project.

For a local decision, the most useful evidence is a dated, project-specific set of load and water projections alongside the utility’s interconnection and capacity findings and the water provider’s system information. Read each figure with its units, assumptions, geography, time period, and project status. That is how a community can separate a credible local estimate from a national average or an unverified promise.

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