UK Water Industry Warns Water Shortages Threaten Data Center Expansion Plans

The UK water industry has issued a sharp rebuke to the government’s artificial intelligence growth strategy, warning that the nation lacks sufficient water resources to support the large-scale construction of data centers. Data centers rely heavily on water to cool dense server racks, with cooling towers, chillers, and humidification systems consuming significant volumes directly, while high electricity demand also drives substantial indirect water use. This tension between digital infrastructure ambitions and water scarcity is emerging as a critical policy challenge.

Water UK, the trade association representing water companies across England and Northern Ireland, stated in a public written briefing to lawmakers that the government’s water resource forecasts are “fundamentally flawed” and “explicitly exclude” the water demands of data centers. The briefing noted that the government’s policies on AI growth zones, the AI science strategy, and the AI Opportunities Action Plan “make no mention of water.” Furthermore, the Environment Agency’s latest national water resources framework, published in June 2025, similarly fails to account for data center water use. “The government appears to assume that the country will always have enough water for its economic ambitions,” the briefing stated, “but the reality is far from this.”

The warning comes amid a broader context of water stress. A House of Lords report in May projected that England’s public water supply will face a daily shortfall of 5 billion liters by 2055. Water UK noted that over three-quarters of UK data centers are already located in southern and eastern England, a region under severe water pressure where multiple water companies have imposed hosepipe bans on millions of residents due to sustained heat and low rainfall. The association argued that without policy adjustments, new data center construction in these areas “may simply not be possible” because existing supply networks are already strained. “Given that leakage reduction and water efficiency targets are already extremely challenging, the only feasible ways to increase supply are to take more water from the environment—potentially causing environmental damage—or to build new infrastructure, which for a large reservoir can take 15 years from planning to completion,” the briefing added.

Specific examples highlight the scale of the challenge. In Slough, the UK’s most data center-dense area served by Affinity Water, approximately 125 data centers are already planned or under construction, most in areas already subject to water use restrictions. In May, Affinity Water told lawmakers that some data centers are applying for up to 3 million liters of water per day, equivalent to the peak demand of 3,500 households. The company noted that the current planning framework is built around household growth and per capita consumption, and has not been adjusted for commercial users with water demands comparable to a market town. Due to Environment Agency licensing requirements, data centers can currently only use drinking water. Water UK estimates that data centers in England currently consume 6.6 million liters of drinking water daily; if the government achieves its target of tripling data center capacity by 2030, this figure could rise to 19.8 million liters per day. Jon Chappell, deputy director of Water UK, described the situation as “unforgivable” and “a genuine failure by government.”

The issue extends beyond England to Ireland, where similar concerns have sparked public criticism of water companies and the government over a lack of transparency regarding data center water usage. The UK government has designated data centers as Critical National Infrastructure, a status that critics argue could prevent water companies from restricting their water use, potentially prioritizing them over households during peak demand periods. Oliver Hayes, head of big tech and campaigns at advocacy group Global Action Plan, said it is unclear why data centers have earned this special status, raising the possibility that “data centers running chatbots or helping people do trivial or pointless things could be protected and prioritized.” In response, Water UK has requested that the government publish drought priority guidance to clarify which sectors get water during shortages, but the relevant ministries have yet to issue such guidance. “Without resolving this, society faces difficult trade-offs,” Chappell said.

In late June, water companies, regulators, and agencies jointly announced a £75 million water-saving campaign urging the public to reduce consumption, as England and Wales already rank among the highest in Europe for per capita water use. The government had planned to publish a national policy statement on AI growth in February to provide an overarching strategy and clarify cumulative impact assessments, but that plan has been delayed. A government spokesperson responded by stating: “Environmental protection and sustainability must go hand in hand with economic growth. We will unlock growth while securing water supplies, including exploring alternatives or measures to reduce data centers’ impact on water supply and wastewater discharge. We are also taking concrete steps to ensure water security and meet higher demand, including record infrastructure investment and building nine new reservoirs.”