Sydney Data Center Approvals Raise Water Security Concerns

Sydney authorities have approved the construction of data centers without requiring measurable plans to reduce water usage, sparking fears that the sector’s rapid growth will put residents in competition for the resource.

The New South Wales state government, which oversees Australia’s largest city, has approved all 10 data center construction requests it has reviewed as expanding its planning powers in 2021. Approvals have been granted to companies including Microsoft (MSFT), Amazon (AMZN), and Blackstone (BX), as revealed by examined documents.

These centers represent a total of A$6.6 billion (US$4.35 billion) in construction costs but could consume up to 9.6 gigaliters per year of potable water – almost 2% of sydney’s maximum water supply – according to the documents.

Less than half of the approved applications included projections for water savings through the use of alternative sources. while state planning law requires data center developers to “demonstrate how the advancement… minimizes consumption of energy, water… and material resources,” it does not mandate projections for water use or savings. developers are required to state which alternative water sources they will utilize, but not in what quantity.

The findings suggest authorities are approving projects with a meaningful impact on public water demand based on generic, non-measurable assurances from construction companies eager to capitalize on the global US$200 billion data center boom.

The State Planning department confirmed the 10 approved data centers collectively account for an annual water consumption of 9.6 gigaliters,but noted that five have indicated plans to reduce demand over time. The department did not identify the specific projects nor comment on whether their water reduction plans are measurable.

“In all cases, Sydney Water has advised the Department that it can provide the necessary water to the data centers,” a department spokesperson said in an email to Reuters.

According to Sydney Water projections shared with Reuters, data centers could absorb up to a quarter of Sydney’s available water supply by 2035 – 135 gigaliters. These projections assume the centers will meet targets for reducing water use for server cooling, but do not specify what those targets are.

Sydney’s drinking water supply relies on dams and a desalination plant, making the supply increasingly constrained as the population grows and temperatures rise. In 2019, its 5.3 million residents were prohibited from watering gardens or washing cars with hoses during a period of drought and devastating bushfires.

“There is already a deficit between supply and demand,” said Ian Wright,a former Sydney Water scientist and now an associate professor.