Datacentres hit power, water and location limits
Datacentre expansion is increasingly constrained by local power, water and geography rather than just latency or tax incentives, with operators moving to regions that can supply abundant energy. Reports noted U.S. datacentres shifting west for cheap power and that Google used roughly 40% of The Dalles’ water last year, illustrating the local resource pressure. (computerweekly.com) (dailytidings.com)
Datacentres are no longer picking sites mainly for fast internet links or tax breaks; in many U.S. markets, the harder limit is whether a town can spare the power and water. (computerweekly.com) Computer Weekly reported that U.S. operators are shifting west toward places with cheaper, more abundant electricity, with Texas identified as a hotspot as projects move into the gigawatt age. The article describes power availability, not latency, as the main site-selection test in several new builds. (computerweekly.com) In The Dalles, Oregon, Google’s datacentres used about 550 million gallons of water in 2025, or roughly 40% of the city’s total water consumption, according to a local report published April 12, 2026. The same report said the company’s water use rose 26% from the prior year. (dailytidings.com) A datacentre is a warehouse of servers, and those servers turn electricity into heat that has to be removed. That makes two local inputs decisive: a grid that can deliver large amounts of power and a cooling system that can shed heat without overrunning local water supplies. (energy.gov) (mostpolicyinitiative.org) The U.S. Department of Energy said datacentres consumed about 4.4% of U.S. electricity in 2023 and could reach about 6.7% to 12% by 2028. Lawrence Berkeley National Laboratory said U.S. datacentre electricity use climbed from 58 terawatt-hours in 2014 to 176 terawatt-hours in 2023 and could rise to 325 to 580 terawatt-hours by 2028. (energy.gov) (eta-publications.lbl.gov) That surge is colliding with older datacentre hubs that already have packed grids. In Virginia, Dominion Energy told regulators in a February 2026 filing that datacentre customers had requested nearly 70,000 megawatts of power, almost three times the utility’s January 23, 2025 peak load of 24,678 megawatts. (virginiabusiness.com) Water is becoming a second permitting fight, especially for facilities that use evaporative cooling on hot days. Missouri’s Most Policy Initiative said direct water use depends on the cooling design, while indirect water use also rises with the electricity a datacentre buys from power plants that themselves use water. (mostpolicyinitiative.org) Google says it has been trying to answer that pressure with water targets of its own. The company said in its 2025 Water Stewardship Project Portfolio that it aims to replenish 120% of the freshwater consumed across its offices and datacentres, on average, by 2030. (sustainability.google) Investors are now pressing the biggest cloud companies for more disclosure on those tradeoffs. Reuters reported on April 6, 2026 that shareholders were asking Amazon, Microsoft and Google for more detail on water use and conservation as community opposition has forced some datacentre projects to be delayed or dropped. (usnews.com) The result is a simpler map for a more complicated industry: the next wave of datacentres will go where utilities can add power fast, where cooling can be secured, and where local governments decide the jobs are worth the load. (computerweekly.com) (virginiabusiness.com)
