By Shichen Zhao
From water treatment technologies to smart water management, water tech innovations are increasing the efficiency of data centres.
The startling progress of artificial intelligence (AI) has led to some equally startling projections of the amount of clean water that will be needed to cool the data centres powering these systems.
Having introduced this topic in a previous blog, let’s now dive into water technologies that could bring transformative efficiency gains.
Data centres are cooled with a variety of systems, and operators often adopt different solutions across their sites around the world. There is no ‘one size fits all’ solution, as the local climate dictates which systems are appropriate. While some data centres are shifting to alternative methods of cooling, evaporative cooling towers remain common, which cool air by evaporating water. Millions of gallons of water each day are evaporated in these cooling systems.[1]
Spotlight on water technologies
When water-based cooling systems are necessary, withdrawals can be minimised by utilising alternative water sources, such as collected rainwater, seawater, and recycled municipal wastewater. These sources are particularly valuable in water-scarce regions and align with ESG frameworks such as Water Usage Effectiveness (WUE) standards.
While potable water is the most common water source for data centres, there is increasing interest in other sources such as collected rainwater, seawater and recycled municipal wastewater, especially in water-scarce regions.
Some cooling systems are designed to recirculate water to minimise waste by harvesting rainwater and greywater, or recycling water for local community use. For example, Google*’s data centre in Hamina, Finland, was the first to use an advanced sea water cooling system.
We believe various water treatment technologies are set to benefit from this trend, such as media filtration and membranes, reverse osmosis and disinfection. 
Smart water management could also increase efficiency. Transitioning from traditional cooling to targeted cooling that focuses on individual rows of servers may be effective. Additionally, Google uses AI and machine learning to train deep neural networks in its data centres to optimise energy consumption.
Companies at the forefront of innovation
As the complexity of the sector’s water quality needs increases, opportunities for outsourcing water treatment are growing, creating opportunities for solution providers. Below are some examples:
Ecolab* – Data centre water management solutions
Ecolab is a global leader in water treatment, hygiene and infection prevention solutions, with a particular focus on the industrial sector. Ecolab’s 3D TRASAR Cooling Water programmes integrate smart sensor technology and industrial water treatment technology to optimise cooling systems. Ecolab has enabled a central water treatment plant, dedicated to data centre cooling, to save 2.9 million gallons of water annually translating to $15,532 in yearly savings.[2]
Xylem* – Data centre water treatment solutions
A global supplier of water equipment specialising in pumps, analytical instrumentation and wastewater technology, Xylem offers advanced water treatment solutions for data centres. A global hyperscale data centre utilising Xylem’s solutions has achieved a 40% reduction in water consumption compared with traditional sand filtration methods and a 50% decrease in cooling tower maintenance.[3]
Organo* – Ultrapure water production
Organo specialises in process water and ultrapure water production, primarily serving the power and microelectronics industries in Taiwan and Japan. Over 60% of its sales come from the semiconductor-related water treatment business. Since installing its first water treatment facility in the early 2000s, Organo has been responsible for ultrapure water production and supply at nearly all TSMC*’s plants.
The future of the sector
In addition to being essential to our daily activities, the infrastructure supporting digitalisation is crucial for achieving key societal goals, including increased financial inclusion and environmental sustainability. Emerging technologies, such as AI-driven water management systems, are set to play a significant role in reducing water consumption and enhancing the ESG performance of data centres.
Data centre companies in which L&G invests are among those pushing for positive change. For example, Kao Data*, a data centre developer and operator, is a signatory of the Climate Neutral Data Centre Pact, which sets out commitments to curb water usage, challenging the data centre industry to reach zero water use by 2030.[4]
To learn more about our approach and expectations concerning water, read our Water Policy.
As part of our series of blogs on this topic, our next instalment will explore how AI and data centres, despite their significant upfront water consumption, could ultimately contribute to water-saving innovations.
*For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.
[1] Lenovo Story hub
[2] Ecolab company website
[3] Xylem company website
[4] https://kaodata.com/uploads/Kao-Data-ESG-Report-2023-24-v1.pdf
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