Minister expands on water expectations of Data Centre Covenant

(by Verity Mitchell)

In conjunction with the Data Centre Covenant published by HM Treasury on 28 October, water minister Emma Hardy made a comment on sustainable data centre growth through responsible water use.

She noted that information from data centres will improve how water mains, sewers and treatment plants are managed, enabling water companies to identify and address problems before failures occur. The growth in data centres, however, needs to be environmentally sustainable.

Evidence gathered by the Government and stakeholders suggests that current data centre water use remains a relatively small proportion of overall non-household (NHH) consumption (estimated as less than 0.2% of NHH use in England), and that many facilities already use highly water efficient cooling technologies.

However, rates of potential future growth, particularly in areas already experiencing water stress, mean that greater action on controlling water use is crucial. 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.

Hardy strongly encouraged all data centre operators to publish annual reporting on environmental metrics, including water use and energy performance, and share this with the Government. Data centre operators should disclose total and peak water use, together with their Water Usage Effectiveness.

Hardy asked 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 wastewater where these are environmentally appropriate and economically viable.

• Only consider reliance on additional freshwater from the public water supply or environment when demand management and recycled sources have been fully assessed and it is clear they cannot reasonably meet operational requirements.

Government will continue to explore and consider innovative solutions to demand management and use of alternative water sources, such as treated wastewater. Hardy confirmed that 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.

Hardy called for collaboration by data centre developers 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 wastewater and waste heat.

Sites that incorporate environmental and drainage and wastewater co‑benefits (e.g. rainwater management, sustainable drainage systems and tree planting features) were strongly encouraged. Planning applications should demonstrate that opportunities to connect waste heat to local heat networks have been considered, along with the reuse of wastewater within nearby industrial, energy and utility systems.

• In its submission to the Data Centres All Party Parliamentary Group inquiry, Water UK called for the following from the data centre sector, to enable its growth:  

• Mandatory disclosure of water usage at the planning stage, mirroring emerging frameworks in Australia, the European Union and some states within the United States.

• Minimum water-use efficiency standards and bans on open-loop cooling systems within designated water-stressed areas.

• Changes to Environment Agency permitting to enable data centre operators to use treated wastewater for cooling at scale to prevent depleting local drinking water supplies.

These specific asks are in addition to a broader package of recommendations from Water UK on empowering the water industry to support growth through reforms to planning, water resources management, abstraction and investment.