Data Centers Drink too Much Water?

The Myth and the Reality in Portugal 

Joao Correia 

 

 

There is a number circulating in the public debate that deserves the same scrutiny we apply to any other technical data point…

A 150 MW data center consumes between five and ten million litres of water per day. This figure appears in opinion pieces, social media comments and even in positions taken by some policy makers and (of course) it has fuelled a narrative that data centers are a water threat for a country facing structural water stress, especially in the Alentejo and the south.

Does this number represent the reality of the industry in 2026 or is it projecting a cooling technology that already belongs to the past onto the future?

The origin of the number lies in open evaporative cooling towers, the dominant technology in data centers built between 2000 and 2015. In these systems, water circulates through a tower where a portion evaporates to remove heat from the refrigeration circuit, and that evaporated water is lost to the atmosphere, consuming between 1.5 and 3.0 L/kWh of IT energy.

A 150 MW data center operating with this technology can indeed consume five to ten million litres of water per day, and it is this number that feeds the newspaper headlines and the legitimate concerns of local communities. The problem is that this scenario is increasingly unrepresentative of what is being built today and in Portugal it is practically irrelevant for the projects under development.

 

 

 Portugal has a living laboratory of what state-of-the-art data center cooling looks like without freshwater consumption. The SINES Data Campus, operated by Nscale and Start Campus in Sines, is the world’s first artificial intelligence data center to use seawater as its primary cooling system, capturing Atlantic water through the conduits of the former coal plant and returning it to the ocean with a temperature increase of only one degree Celsius. This system completely eliminates freshwater consumption for cooling and gives the campus a Water Usage Effectiveness (WUE) rating of zero, with a design Power Usage Effectiveness (PUE) of 1.1. The seawater is captured, circulates through heat exchangers and is returned to the sea without consumption, evaporation or pressure on the region’s water resources.

The Sines case is not an exotic exception, instead it is the direction the industry is taking.

The three main cooling technologies for hyperscale data centers in a Mediterranean climate are:

• air cooling (dry coolers)

• direct-to-chip liquid cooling

• immersion cooling

They all share a common characteristic when properly designed, they can operate with WUE close to zero. Air cooling with dry coolers consumes no water, only electricity for the fans; direct-to-chip liquid cooling uses a refrigerant that circulates in a closed loop without water loss; and immersion in dielectric fluid eliminates even the need for fans in the racks.

For a country with a Mediterranean climate where free cooling is possible for four to five months per year, these solutions are not only viable but economically competitive.

The Plano Nacional para Centros de Dados (PNCD), approved in March 2026 through Council of Ministers Resolution 70/2026, is explicit on this point. The plan states that technological solutions exist to significantly mitigate environmental impacts, namely water-free cooling systems, waste heat recovery and greater energy efficiency. The Portuguese government recognises that the technology exists, is available and must be required as a condition for licensing new projects, and no data center licensed under the PNCD can operate open evaporative towers without robust technical justification.

Global data confirms that the industry is solving the problem. S&P Global Market Intelligence estimates that 43% of data centers worldwide are exposed to high water stress, but this number reflects the legacy of facilities built before 2015, not the state of the art of 2026 projects (source: data-center-flexibilidade.md:40). Global water demand for data centers in the US is expected to increase from 70 million cubic metres in 2023 to 150 million in 2028, but this growth is largely explained by the expansion of the installed base, not by the water inefficiency of new projects. Modern operators, especially hyperscalers like Microsoft, Google and Amazon, are designing their new campuses for WUE below 0.2 L/kWh and some facilities already operate at zero WUE.

It is important to recognise that a real tension exists between energy efficiency and water efficiency. Systems designed to minimise water consumption may increase electricity consumption for heat rejection and the reverse is also true: evaporative towers that consume more water tend to have better PUE because evaporation is thermodynamically more efficient than dry cooling. The choice of cooling technology is therefore an exercise in systemic optimisation, not a binary decision between water and electricity and it must take into account the local climate, the cost of water, the cost of electricity and the regulatory requirements of the territory. For Portugal, where electricity is mostly renewable and freshwater is a scarce resource in several regions, the equation leans clearly toward low- or zero-water solutions.

The real problem with data center water consumption is not current technology but the legacy of facilities built in an era when water was a cheap resource not accounted for in sustainability KPIs.

Many of these older data centers, built between 2000 and 2015, operate open evaporative towers with high water consumption and no WUE monitoring and it is these facilities that feed the statistics we see in the headlines.

The new projects in Portugal, licensed under the PNCD and subject to mandatory PUE and WUE reporting under DL 84/2024, do not fit this profile.

The public discussion would benefit from more numbers and less noise.

Instead of asking whether data centers drink too much water, we should ask what the WUE of each project is, what cooling technology it uses and whether that technology is appropriate for the water stress of the region where it is located.

In Portugal, the country’s largest project has zero WUE, the PNCD requires water-free cooling, additionally the industry is adopting technologies that definitively separate digital growth from freshwater consumption.

This does not mean that every current or future project is perfect but turning the narrative that data centers will drain Portugal’s drinking water is a mistake that the engineering, the regulation and the available facts do not support.