UK's Datacentre Plans Under Threat Amid Water Scarcity Warnings

Water UK, the trade body representing water companies across Britain and Northern Ireland, has issued a stark warning that the government's ambitious artificial intelligence (AI) growth plans are 'fatally flawed' due to a lack of sufficient water for future datacentres. In a written briefing to Members of Parliament, the industry body stated that the government's water forecasts 'explicitly exclude' the surging water demand from datacentres. This revelation highlights a critical oversight in the UK's strategy for digital infrastructure development.

Datacentres are highly reliant on substantial volumes of water to manage the heat generated by densely packed servers. Cooling towers, chillers, and humidification systems directly consume water, while significant amounts are also used indirectly through the high electrical power requirements. According to Water UK, datacentres in England currently consume 6.6 million litres of drinking water daily. With the government's objective to triple datacentre capacity by 2030, this usage could escalate to 19.8 million litres per day. Water suppliers like Affinity Water have reported that some datacentres are requesting up to 3 million litres of water daily, equivalent to the peak water demand of 3,500 homes.

The absence of any mention of water consumption in key government policy documents, such as 'Delivering AI Growth Zones', 'AI for Science Strategy', or 'AI Opportunities Action Plan', has drawn significant criticism. This suggests an assumption that the country will always have enough water for its economic needs, a notion Water UK firmly disputes as being far from the truth. A House of Lords report published in May projected that England faces a 5 billion litre per day shortfall in public water supplies by 2055.

This issue is further exacerbated by the concentration of datacentre developments in already water-stressed areas, particularly the south and east of England. Millions of residents in these regions are already under hosepipe bans due to prolonged extreme heat and insufficient rainfall. Water UK indicates that new datacentre growth in these areas 'may be impossible' without policy changes, given the existing pressure on the network. The scarcity of water has the potential to impede housing developments, business expansions, and even the construction of a new cancer hospital in Cambridge.

The government has positioned AI at the heart of its growth agenda, committing £68 billion in investment since January 2025. However, the water industry is concerned that the designation of datacentres as critical national infrastructure could limit water companies' ability to restrict their water usage. Water UK has urged ministers to publish a drought hierarchy to prioritize sectors during water shortages but has yet to receive a response. A government spokesperson affirmed their commitment to protecting water supplies while fostering growth, exploring alternatives, and investing in infrastructure, including nine new reservoirs.

Analysts and market expectations suggest that this water scarcity problem could severely impact the UK's technology sector growth targets and overall economic development. Urgent policy adjustments and technological innovations are anticipated for sustainable water resource management and to reduce the environmental footprint of datacentres. Without such measures, the UK's ambitious AI and digitalization goals risk being undermined by the fundamental lack of a vital resource: water.