AI megaproject raises alarm in some of Europe’s driest regions

Europe’s ambitious artificial intelligence strategy is at risk of colliding with an often overlooked but critically important environmental issue: water scarcity.

The European Union has big plans for data center expansion, announcing in April that it intends to at least triple its capacity over the next five to seven years as part of its efforts to become a world-class AI hub.

The rapid deployment of data centers that underpin every aspect of the digital economy, from social media and online banking to AI tools such as ChatGPT, is raising concerns, especially in regions already facing water scarcity.

The problem is particularly acute across southern Europe, where approximately 30% of the population is known to live in areas of permanent water stress. This refers to a situation where the demand for water exceeds the available supply within a specific period of time.

Data centers typically require large amounts of water to prevent overheating.

Like big tech companies Amazon, microsoft and meta For example, Google is investing billions of US dollars in new facilities in Spain, and Google plans to develop three hubs in the Attica region of Greece.

Kevin Grechsch, associate professor of water science, policy and management at the University of Oxford, told CNBC that plans to build data centers in water-stressed regions across Europe reflect a lack of integrated thinking on the part of policymakers.

“AI is the buzzword and the talk of the town,” Greksch says. “So national and local politicians are trying to play with it, and it sounds like they’re investing in the future and creating some new jobs, but sustainability seems to be on the back burner.”

Greksch said the rapid deployment of data centers across the region has raised many unanswered questions, such as what would happen if data centers were shut down in a drought scenario, given that most jurisdictions prioritize public water supplies over everything else. He admitted he had no answer to this prospect.

“Data centers tend to be built in arid or semi-arid climates because they are favorable environments for servers, but such regions also tend to be prone to water shortages and droughts,” Greksch said.

A spokesperson for the European Commission, the EU’s executive arm, said that the policy of the European High Performance Computing Joint Initiative (EuroHPC JU) includes selecting hosting sites for AI factories based on criteria that prioritize energy efficiency and environmental sustainability.

“Green computing will continue to be pursued through energy-efficient supercomputers that are optimized for AI, utilizing techniques such as dynamic power savings and reuse techniques such as advanced cooling and recycling of the heat produced,” a spokesperson told CNBC in an email.

The EU cited the new JUPITER supercomputer in Jülich, Germany, as a “leading example of European excellence” in energy efficiency efforts, saying the system runs entirely on renewable energy and features “state-of-the-art” cooling and energy reuse.

Amazon plans to open three data centers in Aragon, a severely water-stressed region in northeastern Spain. The proposal, which the US tech giant says would create thousands of jobs, has raised tensions between local farmers and environmentalists.

In the UK, the small English village of Culham has been chosen as the first location for the UK government’s so-called AI ‘growth zone’. The site in Oxfordshire is located near one of the country’s first new reservoirs in 30 years, raising concerns it could put further pressure on the region’s water supply.

Nick Kraft, senior analyst at political risk consultancy Eurasia Group, said “extremely dry” and water-stressed regions were being targeted across Europe for further data center development.

“Complicating matters is the fact that the most common understanding of data center water usage, and what companies typically report when communicating with local stakeholders, is on-site water usage, or water used to cool data centers,” Kraft told CNBC via email.

“This is despite the fact that more than half of data center water usage is off-site, occurring in energy generation and semiconductor manufacturing,” he added.

Kraft said there are new signs that data center operators are maturing in water management, but assessing the overall water use of these projects is expected to remain a major challenge.

The data center industry’s average exposure to water stress is expected to be high in the 2020s, with southern European countries such as Spain and Greece expected to face the most water stress, according to an analysis published last month by S&P Global.

Michael Winterson, executive director of the European Data Center Association (EUDCA), which represents the interests of the European data center operator community, said water consumption was a concern that the industry took seriously.

“Water treatment and collection is normal for us now, and there is continued innovation in this area that is reducing the amount of energy required and the amount of water required, and chemical processing is rapidly approaching near zero,” Winterson told CNBC.

Winterson said the “next big thing” the EUDC wants to do in Europe, noting that the region typically lags behind the United States in this area, is to obtain a supply of non-potable water, which refers to water that is not safe to drink but can be used for other industrial processes.

“This reduces the chemicals and energy used to obtain the water, keeping the drinking water for its intended purpose,” he added.

Meanwhile, many data center operators argue that the energy-intensive nature of their technology means they need to consider sustainable innovation. Businesses often use water use efficiency (WUE) as a metric to determine water efficiency in data centers, but this metric has its own limitations.

Microsoft is experimenting with data center designs that consume zero water for cooling, and Startcampus said its Sines facility in Portugal is achieving zero WUE by recycling seawater through the system.

The EUDC Secretary-General also sought to underline the importance of data centers for the region’s digital economy.

“This equates to trillions of dollars of GDP and millions of technology jobs in Europe alone, which on average pay significantly more than the national average wage. A 20 (megawatt) data center uses the same amount of water as a golf course. How much GDP does a golf course generate? What kinds of jobs does it create?” Winterson said.

European lawmakers have previously warned of a growing water crisis in the region, saying problems such as water scarcity, food security and pollution urgently need to be tackled as Europe is the fastest-warming continent on earth.

Meanwhile, the European Environment Agency said late last month that the region’s water resources were now under “severe pressure”, with water stress affecting a third of Europe’s population and territory.

Laura Ramsamy, head of climate and disasters at data analytics platform Climate

In the Netherlands, for example, Meta suspended plans to build a large data center in the Seewalde region in 2022 due to environmental concerns, particularly opposition to high electricity and water consumption.

Ireland, which has long embraced the deployment of data centers to fuel the AI ​​boom, has also recently come under increased scrutiny from environmental groups, with many of these hubs concentrated in the Dublin area.

In particular, the Netherlands and Ireland have imposed de facto bans on new data centers over the next few years due to concerns about grid capacity and environmental impact.

A spokesperson for Ireland’s Department of Climate, Energy and Environment said the construction and operation of data centers had made a “positive contribution” to the Irish economy over the past decade.

“Like all sectors of our economy, data center operations and development are underpinned by Ireland’s legally binding climate targets and the need to maintain robust energy security,” the spokesperson said.

“Ireland’s largest data centers are understood to primarily operate air-cooled systems rather than water-cooled systems, which distinguishes Ireland from many data center locations around the world,” they added.