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Market analysis··2 min read

Data Centres: Challenges Posed by Water Demand in the German Real Estate Market

The planned expansion of data centre capacities in Germany raises questions regarding resource consumption, particularly concerning the significant water demand of cooling systems.

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Data Centres: Challenges Posed by Water Demand in the German Real Estate Market. Illustrative image generated using artificial intelligence (AI). The image does not depict a real property, person or event and is not a documentary photograph. Labelled in accordance with Article 50(4) of the EU AI Act.

Germany plans a significant expansion of its data centre capacities. This infrastructure relies not only on a secure power supply and suitable land, but also has a significant water demand depending on the cooling system used. This requirement is increasingly becoming a focus for property developers and investors.

The necessity for expanding data centres stems from the increasing demand for digital infrastructure. This includes, among other things, cloud services, big data applications and the advancing digitisation of the economy and society. A high-performance and resilient data centre infrastructure is considered fundamental for Germany's competitiveness as a business location.

The water consumption of data centres is caused by their cooling. IT hardware generates considerable waste heat during operation, which must be dissipated to ensure stable and efficient function. Liquid-based cooling systems, often preferred due to their efficiency, can require larger quantities of water. This poses a particular challenge in regions with an already strained water supply.

Implications for Site Selection and Project Development

For site selection and the realisation of new data centre property projects, the availability of water is gaining strategic importance alongside electricity supply. Developers and operators must examine local water supply conditions and regulatory frameworks already in the early planning phases. This includes analysing available water volumes, water quality, and wastewater disposal capacities.

  • —The water demand of data centres influences the feasibility of new construction projects.
  • —Regional water availability is becoming a critical factor in site selection.
  • —Developers must prioritise sustainable cooling solutions with low water consumption.
  • —The integration of circular economy principles for water use is moving into focus.

The industry is challenged to develop and implement innovative and water-saving cooling technologies. This includes the use of free cooling, the reuse of greywater, or the optimisation of closed cooling systems. Forward-looking planning that considers the water footprint will be crucial for the sustainability and acceptance of data centre projects. This thus directly influences the value and attractiveness of property locations for this specialised type of use.

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