Thirsty work: how the rise of massive datacentres strains Australia's drinking water supply

"As Australia rides the AI boom with dozens of new investments in datacentres in Sydney and Melbourne, experts are warning about the impact these massive projects will have on already strained water resources. Water demand to service datacentres in Sydney alone is forecast to be larger than the volume of Canberra's total drinking water within the next decade. In Melbourne the Victorian government has announced a $5.5m investment to become Australia's datacentre capital,"

"but the hyperscale datacentre applications on hand already exceed the water demands of nearly all of the state's top 30 business customers combined. Technology companies, including Open AI and Atlassian, are pushing for Australia to become a hub for data processing and storage. But with 260 datacentres operating and dozens more in the offing, experts are flagging concerns about the impact on the supply of drinking water."

"Cooling requires huge amount of water' Prof Priya Rajagopalan, director of the Post Carbon Research Centre at RMIT, says water and electricity demands of datacentres depend on the cooling technology used. If you're just using evaporative cooling, there is a lot of water loss from the evaporation, but if you are using sealers, there is no water loss but it requires a huge amount of water to cool, she says."

Australia is experiencing an AI-driven datacentre boom focused in Sydney and Melbourne, with hundreds of facilities operating or planned. Datacentre water demand in Sydney alone is forecast within the next decade to exceed Canberra's total drinking-water volume. Victorian government investment aims to make Melbourne a datacentre capital while proposed hyperscale projects already surpass the water needs of most top business customers. Cooling systems drive most of the water use, and different technologies have vastly different footprints. Evaporative cooling causes significant water loss; sealed or high-capacity cooling also requires large water inputs. Some operators are deploying liquid-to-chip cooling to reduce facility-wide water use.

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