Australia’s peak water industry body has called for national water-efficiency standards for new data centre developments, arguing that clearer rules and transparent reporting would help ensure the sector’s rapid expansion does not place unnecessary pressure on water resources.
In a new report, the Water Services Association of Australia (WSAA) outlined a series of policy measures to support more sustainable long-term water use in data centres. Data Centres and Water in Australia: A resource for sustainable data centre development sets out approaches intended to guide both developers and water utilities as demand for digital infrastructure accelerates.
WSAA represents more than 150 water utilities across Australia and New Zealand and supplies water and wastewater services to around 24 million people. The organisation says the rise of hyperscale facilities and edge sites makes it essential to embed clearer expectations for water use, particularly in cooling systems.
According to the report, early engagement between data centre proponents and water utilities, transparent disclosure of water and energy metrics, and the use of recycled water and circular-economy solutions should be prioritised. The paper also argues for consistent regulatory and cost-recovery frameworks across jurisdictions.
The report says the current water use of data centres is low, because existing facilities are generally smaller, legacy centres or still ramping up. However, future generations of data centres are likely to be larger, with greater water use. Exactly how much, depends largely on cooling choices and water sources.
Estimates vary – for example estimates for Sydney range from 1.9% of water supply (data centre sector estimate) in 2030, to around 15 – 20% of supply in 2035 (Sydney Water estimates based on for data centre proponent servicing enquiries). Melbourne is also seeing strong interest.
According to the report, Sydney Water is receiving applications and enquiries for single data centres of up to 40 million litres per day (over 14 billion litres per year (GL/Y)). This is equivalent to 70,000 to 80,000 homes, or 16 Olympic swimming pools per day. It is twenty times the use of the largest existing drinking water customer. Melbourne water utilities are also receiving very large water use applications.
Greater clarity
WSAA executive director Adam Lovell said efficiency standards could provide the sector with greater clarity as it scales. “Australia is well positioned to become a global data centre hub, and that needn’t be at the expense of our water resources,” he said. “The key is to help the sector become smart water users.”
Lovell said Australia has a long history of adapting water systems to support both industry and residential customers, but stressed that growing demand from digital infrastructure requires renewed focus on conservation. “Our experience from around the world shows that strong efficiency standards and regulation are the smartest ways to help data centres use water wisely,” he said. “Water efficiency standards will drive best practice water solutions, help build community trust and provide longer term reductions in water use costs.”
The report notes that many international markets have already adopted more prescriptive approaches to water management in data centres. WSAA argues that adopting similar standards locally would streamline planning processes and reduce uncertainty for developers seeking approvals.
Report author and WSAA manager for policy and customer, Danielle Francis, said transparent reporting of water and energy use remains one of the most significant gaps in Australia’s data centre landscape. “Market-wide, consistent reporting across the sector would improve transparency, support broader performance uplift and build community trust,” she said.
Francis pointed to examples in Asia, Europe and the United States that demonstrate how regulation and clear disclosure requirements can improve industry performance. She suggested that expanding the NABERS framework – currently used to assess energy efficiency in data centres – to include water metrics would be a “good starting point”, alongside incorporating detailed water-use data into servicing applications.
“The water sector will work positively with governments and data centres to help set these standards here sooner, so we can build more sustainable water solutions into new projects,” she said. “If we get this right now, it will have a lasting legacy for decades to come.”
WSAA said it intends the report to act as a reference point for developers, utilities and policymakers as Australia prepares for the next wave of digital infrastructure investment.