The exponential rise in electricity demand, driven by AI infrastructure and high-performance computing, has introduced new stressors. Water is a critical yet often overlooked dimension of the energy transition. Across all stages: extraction, development, refinement, construction, and transport, water remains a non-substitutable input for base-load energy systems. Its role becomes even more pronounced in energy media like hydrogen, carbon dioxide and batteries, particularly as electrification accelerates.
SMRs and Data Centers: A Dual Demand for Water
The global technological acceleration, spearheaded by artificial intelligence and the digital economy, has sparked a new “fever” for the construction of data centers. At the same time, the need for reliable, low-emission energy has turned the gaze of governments and industries to Small Modular Reactors (SMRs) as a solution to power these energy-intensive infrastructures. The combined development of SMRs and data centers requires integration into an integrated hydrological and energy strategy framework. Data centers and SMRs (Small Modular Reactors) require continuous cooling, often relying on freshwater resources. This compounds existing pressures in regions already facing hydrological stress. Site selection, cooling, and water resource management must be evaluated with transparency and strategic foresight, particularly in areas with limited water and increasing demand.
Data centers are often located in arid or semi-arid regions, where the dry climate is optimal for server performance and cooling efficiency. Yet this geographic preference presents a paradox: these areas are frequently prone to drought and water scarcity, while data centers consume substantial volumes of water to prevent overheating. Compounding the issue, nearly half of their water footprint is off-site. It is embedded in supply chains, energy generation, and indirect cooling processes making the full impact harder to trace and mitigate.
Both reactors and data centers require large amounts of water to prevent overheating, often necessitating zones near rivers, lakes, or coastal areas. This raises serious questions about the pressure on water resources, especially in areas with limited aquifers such as southern Europe, the Middle East, California, and Nevada. A 20 MW data center can use between 10,000 and 15,000 cubic meters of water per day, depending on the cooling technology (air cooling /water cooling). Given that public provision is prioritized, what happens when data centers are threatened by drought?
The military dimension is also crucial. As NATO allies increasingly integrate AI and SMR capabilities into their defense posture, the water-energy nexus becomes a shared strategic vulnerability, especially in southern European host nations. The simultaneous operation of SMRs and data centers within military facilities creates a pent-up demand for water, intensifying the pressure on local resources. These facilities house supercomputers, data centers, and AI hubs for cybersecurity, simulations, and strategic analysis. Designed to ensure energy autonomy under crisis conditions, the Pentagon’s Janus program, formerly known as Project Pele, deploys portable nuclear microreactors to U.S. and allied military installations, both domestic and overseas. In its bid to become a global hub for artificial intelligence, the European Union announced in April plans to at least triple its data center capacity over the next five to seven years. Germany officially launched the Jupiter supercomputer in September 2025. It is a milestone that signals its entry into the race for technological leadership. Capable of executing over five million operations per second, Jupiter is designed to power breakthroughs across critical domains including AI, climate modeling, biomedicine, quantum mechanics, and open-access research under the EuroHPC initiative.
According to the Environmental and Energy Studies (EESI), large data centers can consume up to 5 million gallons per day, roughly equivalent to the daily water use of a town of 10,000–50,000 people. In the U.S. alone, data centers used 17 billion gallons (64 billion liters) of water in 2023 for direct cooling purposes. Cooling systems are the primary driver of water use, especially in facilities relying on evaporative cooling towers. Indirect water use also matters as fossil-fueled electricity generation requires significantly more water than renewables like solar or wind. Emerging technologies such as direct and immersion cooling can reduce water demand, but adoption is uneven. According to Water News Europe, some European data centers use up to 12,000 m³ of water per day, enough to meet the needs of a town of 30,000 people. Despite evidence that servers can operate safely at 27°C, many centers still cool to 22°C, increasing water demand unnecessarily. The Climate Neutral Data Centre Pact sets a target of 0.4 L/kWh for new facilities in water-stressed areas by 2025.
Data centers could consume up to 20% of urban water demand in some regions by 2030, especially where AI and hyperscale facilities cluster. SMRs, while more efficient than traditional nuclear plants, still require substantial cooling, especially if deployed inland or in water-stressed zones. If not mitigated, data centers and SMRs could rival or exceed the water demand of mid-sized European countries. For the above reasons EU is preparing minimum water performance standards for data centers by 2026, and SMR deployment is being evaluated for strategic autonomy and sustainability
Projected Water Demand in Europe by 2030 (source: EESI 2025 and EUREAU)
Data Centers in Europe
Across Europe, a wide range of countries are actively planning or building new data centers driven by AI expansion, cloud computing, and digital sovereignty goals. Germany is hosting the Jupiter supercomputer, a major investment in AI and EuroHPC. France leads with over 40% year-on-year growth in data center capacity. United Kingdom is planning a £44 billion contribution to the GDP from the sector. Netherlands remains a central hub, expanding colocation and cloud infrastructure. Spain, despite water stress, is investing in AI-ready data centers. Italy is an active participant in EuroHPC and cloud expansion initiatives. Greece participates in emerging data center portfolios located mainly in Attica. Ireland, a longstanding hyperscale hub, expands its capacity despite grid constraints. Poland is a rapidly growing market for hyperscale and colocation facilities. Austria develops projects in Vienna and surrounding regions. The Czech Republic is increasing investment in regional digital infrastructure. Portugal: envisage to become a southern European node with rising interest in cloud hosting. Denmark, Finland and Sweden are leveraging their cool climate and renewable energy for sustainable operations. A summary of data center presence across key European countries, including notable operators and facility counts are presented in the following table.
Data Centers by Country in Europe (source: Research and Markets 2025)
Southern Europe: A Case Study in Resource Competition
Southern Europe exemplifies a growing paradox: while water scarcity is a long-standing challenge, the superimposition of emerging energy layers such as AI, SMRs, and digital infrastructure, has escalated competition for finite resources. The velocity of technological deployment now outpaces both political comprehension and the financial system’s ability to deliver enabling infrastructure. This mismatch creates vulnerabilities in planning, regulation, and resource allocation. The political environment will inevitably be forced to reconcile competing priorities: electoral preservation versus environmental and infrastructural integrity. This is not a theoretical concern, it is a material one, voiced here not from ideological positioning but from the vantage point of industry experience in energy and infrastructure. The challenge is particularly acute in southern Europe, where in many cases water demand already exceeds available supply. According to the European Environment Agency, the region’s water resources are under severe pressure, with shortages affecting nearly one-third of the population. The average exposure of data centers to water scarcity is projected to remain high throughout the 2020s.
Countries, such as Spain, Italy and Greece, are among the locations predicted to experience the greatest water shortage and are looking towards desalination. European lawmakers have warned of the growing risk of a water crisis in the region, saying there is a pressing need to address issues such as scarcity, food security and pollution at a time when Europe is one of the fastest warming areas on the planet.
These countries are evolving into a digital hub for Southeastern Europe, with significant investments in data centers by international companies. However, questions arise about energy and water sustainability, particularly in regions with increasing demand and limited natural resources. Big tech companies like Amazon, Microsoft, and Meta have invested billions of dollars in new data center installations. In northeastern Spain’s Aragon, a region with severe water shortages, Amazon plans to open three data centers, claiming it will create thousands of jobs. The plan has provoked reactions from farmers and environmental organizations, due to the pressure on water resources. In the field of innovation, Microsoft is testing plans for data centers with zero water consumption for cooling, while Start Campus in Portugal states that it achieves zero “water use effect” (WUE) by recycling seawater at its facilities in Sines. In Greece, Microsoft is implementing a $1 billion plan for three data centers in Attica, while Google announced its intention to develop similar facilities, possibly in Attica. Digital Realty already operates certified data centers in Athens with international connectivity. At the same time, Lancom maintains privately owned data centers in Athens and Thessaloniki, while Telecom Italia has a presence in the Athens area. Despite the promises of employment, data center jobs are typically technical and highly skilled, with a limited number: a 20 MW data center employs around 30–50 people permanently, plus extra staff during construction. Salaries are higher than average, but they primarily concern specialties such as system administrators and infrastructure engineers.
Regulatory Pushback in Northern Europe
While Ireland has benefited economically from the development of data centers, both there and in the Netherlands, restrictions have been imposed on new projects due to concerns about energy sufficiency and environmental impact. Ireland, while remaining a hub for AI, is now under pressure from environmental organizations, especially in the Dublin area. Many data centers there use air cooling, limiting water usage. In the Netherlands, Meta suspended in 2022 a plan for a large data center in Zeewolde, following backlash over its high energy and water consumption. Similarly, in the United Kingdom, the Culham area selected as a “development zone” for artificial intelligence, causes reactions due to proximity to a large water reservoir. The European Data Centre Association (EUDCA) argues that the use of non-potable water in combination with waste management can meet the cooling needs of these industrial processes, reducing chemicals and conserving drinking water for its primary purpose.
Strategic Imperative
Water is no longer a peripheral concern; it’s a strategic variable in energy and digital infrastructure. Systemic resilience, national security, and technological sovereignty depend on integrating hydrological realities into planning. Innovation alone won’t solve cooling demands, hydrogeological risks, or resource conflicts; anticipatory governance must lead. Southern Europe must pair its digital and energy ambitions with water foresight: embed stress metrics, mandate transparent use, priori Europe cycled sources and align infrastructure across sectors. The energy transition is no longer just a matter of electrons, it’s a matter of ecosystems. In the age of AI, water may emerge as the defining constraint.
