AI megaprojects raise alarm in some of Europe’s driest regions

Europe’s ambitious AI strategy risks colliding with a critically important but often overlooked environmental issue: water scarcity.

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

The rapid deployment of data centers, which power all aspects of the digital economy, from social media and online banking to artificial intelligence tools like ChatGPT, has raised some concern, particularly in regions already facing water shortages.

The problem is especially serious in southern Europe, where it is known that around 30% of the population lives in areas with permanent water stress. It refers to a situation where the demand for water exceeds the available supply during a specific period.

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

Big technology companies like Amazon, microsoft and Goal For example, Google has invested billions of dollars in new facilities in Spain, while Google has plans to develop three centers in the Greek region of Attica.

Kevin Grecksch, an associate professor of water science, policy and management at the University of Oxford in the United Kingdom, told CNBC that plans to build data centers in water-scarce areas across Europe reflect a lack of integrated thinking on the part of policymakers.

“AI is a buzzword and the talk of the town,” Grecksch said. “So national and regional politicians are trying to get their hands on it, and it seems like they are investing in the future, creating some new jobs, but sustainability seems to be an afterthought.”

Grecksch said the rapid deployment of data centers across the region raises many unanswered questions, such as, given that in most jurisdictions the public water supply takes priority over everything else, what happens if data centers are closed in a drought scenario? He admitted that he had no answer to this prospect.

“Data centers tend to be built in arid or semi-arid climates because that is the preferred environment for servers; however, those areas tend to be subject to water shortages or are also prone to drought,” Grecksch said.

A spokesperson for the European Commission, the EU’s executive arm, said the European Joint High Performance Computing Initiative (EuroHPC JU) policies include 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 optimized for AI, using techniques such as dynamic energy saving and reuse techniques such as advanced cooling and recycling of produced heat,” the spokesperson told CNBC via email.

The EU called the new “JUPITER” supercomputer in Jülich, Germany, “an excellent example of European excellence” in addressing energy efficiency, saying the system runs entirely on renewable energy and features “state-of-the-art” cooling and energy reuse.

In Aragon, an area of ​​severe water stress in northeastern Spain, Amazon plans to open three data centers. The proposal, which the US tech giant says will create thousands of jobs, has sparked tensions between local farmers and environmental activists.

In the United Kingdom, the small English town of Culham has been chosen as the first of the British government’s so-called AI “growth zones.” The designation of the Oxfordshire site, which is situated near one of the country’s first new reservoirs in 30 years, has sparked fears it could put further pressure on local water supplies.

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

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

“This is despite the fact that more than half of data centers’ water footprint occurs off-site and occurs in power generation and semiconductor manufacturing,” he added.

There are emerging signs that data center operators are maturing in their water management, Kraft said, but assessing the total water footprint of these projects is expected to remain a major challenge.

An analysis published by S&P Global last month said the data center industry’s average exposure to water stress is projected to be high in the 2020s, with southern European countries such as Spain and Greece among the places predicted to face the highest water stress.

Michael Winterson, secretary general of the European Data Center Association (EUDCA), which represents the interests of the European community of data center operators, said water consumption is a concern the industry takes seriously.

“Water treatment and harvesting is now normal for us. And there are continuing innovations in this space that reduce the energy required, reduce the water needed and are rapidly approaching near-zero chemical treatment,” Winterson told CNBC.

The “next big thing” the EUDC wants to do in Europe, Winterson said, noting that the region typically lags behind the United States in this space, is to obtain supplies of non-potable water, referring 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 water and keeps the water drinkable for its primary purpose,” he added.

For their part, many data center operators say it is the energy-intensive nature of their technology that pushes them to consider sustainable innovations. Companies often use water use effectiveness (WUE) as a metric to identify water efficiency in data centers; However, the metric poses its own limitations.

Microsoft has been testing data center designs that it claims do not consume water for cooling, and Start Campus said its Sines facility in Portugal achieves zero WUE by recycling seawater through its systems.

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

“This is trillions of dollars of GDP and millions of tech jobs in Europe alone, which on average pay wages significantly higher than national average wages. A 20 [megawatt] The data center uses the same amount of water as a golf course! How much GDP do golf courses generate? What kind of jobs?” Winterson said.

European policymakers have previously warned of the growing water crisis in the region, saying there is a pressing need to address issues such as shortages, food security and pollution at a time when Europe is the fastest warming continent on the planet.

The European Environment Agency, for its part, said late last month that the region’s water resources are currently under “severe pressure”, with water stress affecting a third of Europe’s population and territory.

Considering the explosion in demand for AI, Laura Ramsamy, climate and hazards lead at data analytics platform Climate

In the Netherlands, for example, in 2022, Meta halted plans to build a large data center in the Zeewolde region amid objections over environmental concerns, particularly high energy and water consumption.

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

In particular, the Netherlands and Ireland have imposed effective bans on new data centers in the coming years due to concerns about network capacity and their environmental impact.

A spokesperson for Ireland’s Department of Climate, Energy and Environment said the construction and operation of data centers has “contributed positively” to the Irish economy over the past decade.

“As with all sectors of our economy, the operation and development of data centers is underpinned by Ireland’s legally binding climate targets and the need to maintain strong energy security,” the spokesperson said.

“Ireland’s largest data centers are understood to primarily operate air-cooled systems rather than water-cooled systems. This differentiates Ireland from many global data centres,” they added.