Data Centres: Responsible Water and Energy Use
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The Minister of State, Department for Environment, Food and Rural Affairs (Emma Hardy)
Today, along with the Minister for Artificial Intelligence, my right hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan), and the Minister for Energy, my hon. Friend the Member for Rutherglen (Michael Shanks), I wish to update the House on the Government’s approach to supporting the sustainable growth of data centres while protecting England’s water resources and helping to maintain a secure, affordable and flexible electricity system.
This statement is part of the Government’s package to deliver responsible data centre growth that backs investment and delivers for host communities. The package combines immediate action with longer-term reform. It aims to strengthen national resilience and support UK supply chains, skills and jobs, while unlocking investment and capacity to underpin AI-driven growth and productivity, built around four expectations: to protect bill payers; to put communities and their resources first; to reindustrialise Britain; and to strengthen UK sovereignty.
Data centres are critical national infrastructure that underpin almost all economic activity and enable the digital services that people and businesses rely on every day, from NHS patient records and banking platforms to communications and entertainment. In the water sector, they will improve how water mains, sewers and treatment plants are managed, enabling water companies to identify and address problems before failures occur. They will play an increasingly important role in national security, resilience and sovereign capability as well as delivering the Government’s ambitions for economic growth, world-leading scientific research, artificial intelligence and improved public services.
The impact of data centres on energy and water systems
As the sector grows, it is important that development takes place in a way that is environmentally sustainable and resilient to future pressures on both water resources and energy systems. Co-ordinated planning is therefore required to ensure that future demand can be met sustainably, while supporting the UK’s long-term water and energy resilience.
Data centres already require substantial electricity supplies, with current UK demand estimated at around 2 GW. Future requirements remain uncertain but could increase significantly as demand for compute and AI grows. Large, continuous and geographically concentrated demand can require additional generation and network infrastructure and create pressures on network capacity, system operability and security of supply. Greater energy efficiency, and flexibility in when, where and how energy is used, can help to manage these impacts and support a more efficient and resilient electricity system.
Evidence gathered by the Government and stakeholders suggests that current data centre water use remains a relatively small proportion of overall non-household consumption—estimated as less than 0.2% of the non-household sector in England—and that many facilities across England already use highly water-efficient cooling technologies. However, rates of potential future growth of the sector, particularly in areas already experiencing water stress that are more adversely affected during hotter periods, mean that greater action on controlling water use is crucial. Increased transparency and information sharing by the data centre sector on long-term planning and water use will be increasingly important. Water companies do not have to supply data centres with water, and therefore early engagement from data centre developers is essential.
Energy and water use are closely linked. Data centre cooling can involve trade-offs between the two: some technologies can reduce energy consumption but increase water demand. Decisions on cooling should therefore reflect local water availability, energy efficiency and broader environmental considerations, rather than considering either resource in isolation.
Improving transparency
The Government recognise the importance of robust and transparent data in planning for sustainable data centre growth, particularly given increasing public scrutiny, concerns from local communities, and heightened media interest in the sector. Greater visibility of water and energy will support water companies, regional planning groups, electricity network and system operators, regulators and the Government to understand future demand and ensure that long-term infrastructure and resource planning keeps pace with investment and development.
To improve transparency across the sector, we strongly encourage all data centre operators to publish and share with the Government annual reporting on environmental metrics, including water use and energy performance. Data centre operators should disclose total and peak water use, together with their water usage effectiveness. On energy, these disclosures should include power usage effectiveness, energy reuse factor, and an appropriate organisational carbon disclosure. Reporting should also cover the site’s technical capability to provide electricity system flexibility and its participation in flexibility services, whether directly or through a third party.
We will work with industry and regulators to develop consistent definitions and proportionate arrangements for the scope, verification and publication of this reporting. We expect the sector to provide this information voluntarily. However, if sufficient data is not provided, we will immediately consider whether a statutory reporting framework is required to ensure appropriate transparency and accountability.
Water and heat reuse
The Government ask developers to adopt a water use hierarchy for data centre development. Demand reduction and alternative water supplies have the potential to reduce pressure on drinking water resources and the environment while supporting continued investment in digital infrastructure. The water use hierarchy asks developers to:
Minimise water demand through water-efficient design, the provision of on-site water storage, operational optimisation, and the use of waterless or water-efficient cooling technologies.
Utilise recycled water once all reasonable demand-management options have been exhausted. Identify the most appropriate recycled source, starting with simpler and more sustainable options, such as rainwater harvesting, before moving to more complex sources, such as water reuse and treated waste water where these are environmentally appropriate and economically viable.
Only where demand management and recycled sources have been fully assessed and it is clear they cannot reasonably meet operational requirements should reliance on additional fresh water from the public water supply or environment be considered.
The Government will continue to explore and consider innovative solutions to demand management and use of alternative water sources. Treated waste water could provide a valuable alternative source of water for data centres and other contained industrial uses, particularly where it can reduce demand on drinking water supplies in water-stressed areas. We will work with water companies, developers and other relevant bodies to explore suitable projects that can demonstrate how treated waste water can be used safely and effectively for cooling and other non-potable applications. The Government and regulators are currently working together to clarify the regulatory pathways and identify practical opportunities for safe and sustainable reuse. This includes considering proportionate approaches for suitable lower-risk schemes, while ensuring that risks to the environment and public health are properly understood and managed.
Decisions on cooling should also assess the interaction between water and energy use so that reductions in one resource do not create disproportionate impacts on the other.
Data centre developers should consider opportunities to make productive use of waste heat. For new developments and material expansions, developers should undertake a heat reuse feasibility assessment, considering the proximity of potential users or networks, and the technical and practical requirements for connection. The findings should inform site design and identify whether a deliverable heat off-take arrangement is feasible. Where reuse is not pursued, the assessment should clearly explain why it is not deliverable.
Environmental resilience and sustainable growth
The Government encourage data centre developers and operators to take a strategic approach to understanding and managing their environmental dependencies, impacts and resource demands, helping to ensure that future growth supports long-term resilience and sustainable outcomes.
To do this, we ask data centre developers and operators to undertake location-specific assessments of their impacts and dependencies on nature and the energy system, and encourage both, where appropriate, to use the taskforce on nature-related financial disclosures’ LEAP approach: locate, evaluate, assess and prepare.
We expect data centre developers to carefully consider anticipated water demand and efficiency, the availability of water resources, and waste water disposal within the relevant catchment. Assessment should be developed in consultation with the relevant water company, taking account of its water resources management plan and drainage and waste water management plan. The findings should inform decisions about site location and cooling technology. We expect that, by securing their own resilience, in the face of water scarcity, data centres will pave the way for future policy considering how other business and public users can maximise the value of their water.
We expect assessments to also consider the site’s expected electricity demand, peak load, energy efficiency, opportunities for demand flexibility, and the feasibility of recovering and reusing waste heat. These considerations should inform site design and early engagement with electricity network operators, local authorities and potential heat users.
We also encourage collaboration to identify opportunities that can strengthen water resilience and deliver wider environmental benefits. This includes exploring opportunities to support catchment-scale initiatives, and encouraging data centres to assess opportunities for co-location with complementary infrastructure to maximise the recovery and beneficial use of waste water and waste heat. Sites that incorporate environmental and drainage and waste water co-benefits—for example rain water management, sustainable drainage systems and tree planting features—are strongly encouraged. Planning applications should demonstrate that opportunities to connect waste heat to local heat networks, or the reuse of waste water within nearby industrial, energy and utility systems, have been considered.
Sustainable growth of the data centre sector and environmental stewardship must go hand in hand. By encouraging efficient use of water and energy, promoting the use of appropriate alternative water sources, improving transparency and supporting better long-term planning, the Government can enable continued investment in this strategically important sector while protecting water resources and supporting a secure and resilient electricity system.
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