How developers, EPCs and GCs can address data center water and power constraints while building community confidence.
Power and water are no longer simply utility inputs for U.S. data center projects.
Grid capacity, water availability, infrastructure costs, environmental impacts and community acceptance are increasingly becoming front-end project risks, influencing site selection, permitting, design, schedules and project approvals.
The challenge for developers, EPCs and GCs is twofold: establish the technical reality early, and make that reality understandable to utilities, regulators and surrounding communities.
Water readiness, power readiness and community readiness increasingly need to be addressed together.
Why Power, Water, and Community Readiness Dictate Data Center Success
The scale of project disruption illustrates the risk.
Public sentiment is also becoming more challenging. In an August 2026 Pew Research Center survey of 10,548 U.S. adults, 60% said they would be uncomfortable with a new data center operating in their area. Fifty-four percent viewed data centers as mostly bad for the environment, 50% for home energy costs, and 49% for nearby quality of life.
Meanwhile, data center electricity demand is accelerating. Goldman Sachs Research projects U.S. data center power demand to increase from approximately 31 GW in 2025 to 41 GW in 2026, a 32% increase in one year. That acceleration follows a long period of relatively little national load growth: EIA estimates U.S. electricity demand increased only about 0.1% per year from 2005 through 2019.
1. Is Enough Power Available for the Full Data Center Campus?
The perception: Residents will pay higher electric bills to build substations, transmission and generation for a private data center.
The reality: Cost responsibility varies by utility tariff, interconnection agreement, regulatory structure and project-specific contract.
FERC’s 2026 large-load proceedings explicitly address consumer protection and infrastructure cost allocation. Commissioner David Rosner described Cost Recovery Agreements intended to prevent residential customers from being left with infrastructure costs if a large-load project does not materialize as planned.
2. Who Pays for Data Center Power Infrastructure?
The perception: A new data center will consume enormous amounts of electricity and reduce grid reliability for surrounding customers.
The reality: The rapid increase in electricity demand is real, but the local impact depends on available generation, transmission capacity, utility infrastructure, project phasing and the site’s power strategy.
Lawrence Berkeley National Laboratory estimates that data centers could account for approximately 11.8% of total U.S. electricity use by 2030, with modeled scenarios ranging from 9.5% to 15.3%.
In June 2026, FERC directed all six regional grid operators under its jurisdiction to justify or reform their rules for connecting data centers and other large loads, with a focus on faster interconnection while protecting reliability and ratepayers.
3. Is the Water Supply Sustainable for the Full Campus Buildout?
The perception: The data center will compete with residents, businesses or agriculture for limited water.
The reality: There is no universal water-use number for a data center. Water consumption varies substantially with cooling technology, climate, source water, IT load and operating conditions.
A Berkeley Lab study found that workload-level water use can vary by more than 10,000-fold, reinforcing that data center water impacts are highly dependent on technology and location.
Local requirements are increasingly moving water analysis upstream. Linn County, Iowa’s 2026 ordinance requires large data center projects to complete a water study addressing supply, expected use, cooling technology, effects on groundwater and surface water, efficiency and contingency planning. Minnesota law similarly requires additional review for qualifying data centers proposing more than 100 million gallons per year of consumptive water use.
4. Are Water and Power Being Optimized Together?
The perception: A zero-water cooling system must always be the most sustainable approach—or using water for cooling is inherently wasteful.
The reality: Water and electricity cannot always be optimized independently.
Reducing onsite cooling-water consumption can increase electrical demand under some conditions, while evaporative cooling may reduce cooling-energy requirements at the expense of greater water consumption.
The appropriate strategy depends on climate, water stress, grid capacity, cooling architecture, source-water quality and anticipated computing density.
5. What Happens to Data Center Wastewater and Cooling Fluids?
The perception: A closed-loop cooling system means there is no wastewater or water-quality risk.
The reality: Closed-loop systems can significantly reduce routine water exchange, but they do not eliminate every fluid-management requirement.
Construction and operation can still generate water or spent fluids through flushing, cleaning, passivation, commissioning, cooling-tower blowdown, maintenance and glycol or coolant replacement.
Technical Readiness and Community Trust Need to Develop Together
Not every community concern about data centers reflects the same level of technical risk.
Some concerns are grounded in genuine constraints around water supply, grid capacity, infrastructure costs and environmental impacts. Others can develop when information is incomplete, unavailable or difficult for the public to understand.
The objective should not be to dismiss concerns as misperceptions. It should be to make the project understandable—and ensure that public commitments are supported by engineering and data.
For developers, EPCs and GCs, that means being prepared to:
Quantify the demand. Explain the source. Show the tradeoffs. Clarify who pays. Document the safeguards. Measure the results.
And those conversations should begin before final design and before formal public engagement, while meaningful options still exist to reduce risk.
Increasingly, successful data center development requires three forms of readiness:
Water readiness. Power readiness. Community readiness.
FAQ
Frequently Asked Questions About Water and Power
Why are data center projects being delayed or challenged in 2026?
U.S. data center projects are increasingly encountering issues involving power availability, water supply, infrastructure costs, permitting requirements and community opposition. Data Center Watch reported at least 75 projects worth approximately $130 billion blocked or delayed amid local opposition in Q1 2026 and at least 45 projects worth nearly $68 billion disrupted during Q2. Some projects appear across reporting periods, so those figures should not be combined into a unique YTD total. For developers, this means water, power, infrastructure and community considerations increasingly need to be evaluated during site selection and design.
Who pays for the power infrastructure required by a data center?
There is no universal answer. Responsibility for new substations, transmission lines, generation and other grid infrastructure depends on utility tariffs, interconnection agreements, regional market rules, regulation and project-specific contracts. FERC’s 2026 proceedings on large-load interconnections include consumer protections and potential cost-recovery mechanisms intended to keep costs associated with serving major new loads from being inappropriately shifted to other customers. For developers, “Who pays for what?” should be resolved early and communicated clearly.
How much electricity will U.S. data centers use?
Berkeley Lab’s 2026 update estimates U.S. data centers could account for approximately 11.8% of total national electricity consumption by 2030, with modeled scenarios ranging from 9.5% to 15.3%. Near-term growth is particularly rapid: Goldman Sachs Research forecasts U.S. data center power demand increasing from approximately 31 GW in 2025 to 41 GW in 2026. Actual demand will depend on which announced projects are completed and when they connect to the grid.
How much water does a data center use?
There is no single water-use figure that accurately describes every data center. Water demand varies with cooling architecture, IT load, climate, source water, cooling efficiency, server utilization and electricity generation mix. Berkeley Lab research found that workload-level water use can vary by more than 10,000-fold depending on these factors. At the national level, Berkeley Lab estimated U.S. data centers directly consumed approximately 66 billion liters of water in 2023. For an individual project, the more useful questions are how much water the full campus will require, where it will come from, how much will actually be consumed and how the project will operate during drought or other supply constraints.
Are zero-water data center cooling systems always better?
Not necessarily. A cooling approach that reduces onsite water consumption may require more electricity under certain climate and operating conditions. Evaporative systems may reduce cooling-energy demand while increasing water consumption. The appropriate solution depends on local water availability, grid capacity, climate, computing density, reliability requirements and lifecycle operating conditions. The more useful objective is to optimize water, energy, reliability and lifecycle performance together.
How can data center developers reduce community opposition?
No communications strategy can guarantee community support, but project teams can reduce uncertainty by providing specific, verifiable information early. Communities commonly want to understand how much water and electricity a project will require, where those resources will come from, who will pay for supporting infrastructure, how wastewater and cooling fluids will be managed, and how actual performance will be monitored. The strongest approach is not simply better PR. It is technical readiness supported by early, transparent and verifiable communication.
Note
Selected Sources
- Data Center Watch — Q1 and Q2 2026 project disruption tracking: Q1 2026 / Q2 2026
- Pew Research Center — 2026 public attitudes toward data centers: View research
- Lawrence Berkeley National Laboratory — U.S. data center energy use: View report
- Lawrence Berkeley National Laboratory — Water use of data center workloads: View study
- FERC — Large-load interconnection action: View release
- Linn County, Iowa — Data center water and land-use requirements: View requirements
Fluid-to-Facility™
Address Water and Cooling Risk Before Design Is Finalized
Fluid-to-Facility™ is Apex’s lifecycle approach to data center water and cooling—connecting planning, design, construction, commissioning, operations, and optimization into one integrated strategy.
From water availability and cooling-fluid readiness to system cleanliness, monitoring, and long-term performance, the framework helps project teams identify risks earlier and make more informed decisions across the full cooling lifecycle.
Use the Data Center Water & Cooling-Fluid Risk & Design Readiness Checklist to surface unresolved assumptions and address project risk earlier.
Brett Robison
Brett leads business development initiatives focused on data centers, liquid cooling infrastructure, and mission-critical thermal management solutions. He works closely with data center operators, EPC firms, cooling OEMs, hyperscalers, and technology partners to develop scalable cooling strategies that support AI-driven growth, operational resilience, and long-term infrastructure performance.