As AI workloads drive unprecedented rack densities, data center developers are facing a growing sustainability dilemma: how to reduce water consumption without dramatically increasing power demand. Traditionally, the industry has treated cooling towers and mechanical chillers as opposite ends of the sustainability spectrum — one consumes water, the other consumes electricity. But the reality is far more complex.
This is the “water-energy nexus”: the interconnected relationship between water and power infrastructure. Energy production requires water, and water management requires energy. For data centers, this means the true environmental impact of cooling systems extends far beyond the facility fence line.
Open cooling towers remain one of the largest direct sources of water consumption in data centers, often accounting for the majority of site water use. Hyperscale facilities can consume hundreds of thousands to millions of gallons of water per day depending on climate and load conditions. As a result, communities in water-stressed regions such as Arizona and Texas are increasingly scrutinizing new data center developments.
To avoid this challenge, many operators have historically turned to mechanical chillers marketed as “water-free” solutions. However, chillers introduce a different problem: energy intensity. Research published in Building and Environment found that chillers can still account for more than 50-70% of total cooling-system energy consumption in data centers, even in facilities utilizing economization strategies.
What is often overlooked is the hidden water cost of that electricity. According to the U.S. Energy Information Administration, most thermoelectric power plants in the U.S. still rely on water-intensive cooling systems, including recirculating cooling towers and once-through cooling methods that withdraw massive volumes of water for heat rejection. In other words, eliminating water use on-site by deploying large chiller plants may simply shift water consumption to the utility level — often within the same watershed.
This growing challenge is pushing data center engineers toward hybrid heat rejection strategies that balance both water and energy efficiency.
Hybrid adiabatic cooling systems offer a middle ground between traditional cooling towers and fully mechanical chiller plants. By operating primarily in dry mode and only utilizing adiabatic cooling during peak ambient conditions, these systems can dramatically reduce annual water consumption while avoiding the significant energy penalties associated with conventional chillers. In many climates, hybrid approaches can reduce water usage by up to 95% compared to open cooling towers while also lowering overall cooling energy demand.
For facilities pursuing completely water-free operation, modern dry cooling technologies provide another increasingly viable pathway. Advances in EC fan technology, heat exchanger design, controls, and high-ambient optimization have significantly improved dry cooler performance, particularly for AI and hyperscale applications utilizing liquid cooling architectures. As a result, engineers now have more flexibility to balance water conservation, power consumption, climate conditions, and permitting considerations based on the specific needs of each site.
As water availability, power constraints, and AI-driven heat densities continue to reshape data center design, there is no longer a one-size-fits-all approach to heat rejection. The most resilient facilities will be those engineered around the right balance of water efficiency, energy performance, climate conditions, and long-term operational risk. By providing hybrid adiabatic and dry cooling technologies, NIMBUS helps consulting engineers, developers, contractors, and data center operators identify the right heat rejection strategy for both new construction and retrofit applications. Connect with NIMBUS Advanced Process Cooling to evaluate the best cooling approach for your facility, region, and long-term growth plans.