Industry body warns UK government over data center water 'blind spot'

The tension between AI industrial goals and resource scarcity creates a direct operational risk for streaming infrastructure. While power constraints are well-documented, water-based cooling is essential for the high-density racks that power modern delivery and transcoding. If water becomes a regulatory bottleneck, developers face project delays and increased public friction, especially in the water-stressed south of England. For the broader ecosystem, this signals a shift toward mandatory closed-loop cooling or air-based systems, which may carry higher capital costs or lower efficiency in extreme heat. Watch for any changes to the National Planning Policy Framework that might explicitly link water permits to data center critical infrastructure status.

The warning from techUK follows the government’s September 2024 decision to designate data centers as Critical National Infrastructure (CNI). This status, the first such designation in a decade, places computing facilities on the same footing as energy and water systems to protect against cyber threats and outages. Per Gov.uk, the move was intended to bolster investor confidence, yet critics argue it complicates local resource management. Because CNI systems often receive priority during emergencies, water companies fear they may have limited power to restrict data center usage during heatwaves, potentially forcing stricter hosepipe bans on residential consumers, per The Guardian in July 2026.

Simultaneously, major cloud providers are attempting to decouple growth from water consumption. Per Reuters and company reports in June 2026, Microsoft has claimed its newest AI data center designs utilize zero water for cooling during normal operations, achieving a 90% efficiency improvement since the early 2000s. Google and Amazon have also committed to becoming 'water positive' by 2030, which involves replenishing more water than they withdraw from local watersheds. However, industry transparency remains a point of contention; a June 2026 report on service.gov.uk noted that only two-fifths of data center operators currently track water usage metrics actively.

Infrastructure pressure is most acute in Greater London and the Thames Valley. In October 2025, the Mayor of London commissioned a specific study into data center water demand as 28 new projects were identified within the Thames Water service area alone. Per Bloomberg, Thames Water has considered flow restrictors and variable peak-time tariffs to manage this demand. With the UK government aiming to triple data center capacity by 2030, Water UK warned in July 2026 that national water forecasts are 'fatally flawed' because they historically assumed a 9% decline in business water demand by 2038, failing to account for the pivot toward water-intensive AI cooling.