To evaluate a proposed data center, ask for its absolute peak electricity demand and annual energy use, its annual and peak-day water demand, and written confirmation that local utilities and water suppliers can serve those loads on the project’s schedule. Then check how the forecasts were calculated, what infrastructure they require, who pays for it, and whether the figures can be independently verified. Efficiency ratios such as PUE and WUE add context; they do not establish that a site has enough power or water.
What electricity and water figures should the developer disclose?
Start with absolute demand, split by project phase and shown both at initial operation and full build-out. A single efficiency score or annual total can hide the scale and timing of the load.
Electricity: peak demand and annual energy
Request the facility’s expected peak demand in megawatts (MW) and annual energy use in megawatt-hours (MWh) or gigawatt-hours (GWh). These answer different questions: peak demand is the power the site may need at a given moment; annual energy is the amount used over a year. Ask whether the peak is a normal operating peak or a maximum design condition, and obtain the forecast’s assumptions for installed IT capacity, utilization, ramp-up, redundancy, cooling, backup generation, and operating hours.
Ask for IT power demand and annual IT energy separately from the total facility figures. Total facility energy includes the servers and other IT equipment plus cooling, power conditioning, lighting, and other support loads. Without these separate figures and a clear measurement boundary, a reader cannot tell what a reported ratio includes or compare it fairly with another facility.
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Water: total volume, peak day, and sources
Request annual water input and maximum-day demand, with units and the forecast period. Break out potable and non-potable water, cooling-tower make-up, blowdown, other site uses, and any wastewater discharge or reuse. Ask whether the estimates represent initial operations or full build-out, average weather or a hot, dry design period, and normal operations or a peak condition.
A water total without source and timing information is incomplete. Ask for a source map identifying municipal supply, groundwater, surface water, reclaimed water, or other sources, and for confirmation from the relevant supplier or authority that the proposed volume is permitted and available when demand is highest.
Use the figures to see what is missing
| Measure | What it tells you | What to request alongside it |
|---|---|---|
| Peak facility demand (MW) | The site’s expected maximum electrical draw | Whether this is normal or design peak; phase, assumptions, and utility service conditions |
| Annual facility energy (MWh or GWh) | Total electricity consumed over the stated year | Forecast year, utilization and ramp-up assumptions, and separate annual IT energy |
| Annual and maximum-day water input | Water volume over a year and on the highest-demand day | Source, potable share, cooling use, operating phase, weather assumptions, and measurement boundary |
| PUE and WUE | Normalized indicators that help describe facility efficiency | Definitions, numerator and denominator, measurement points, reporting period, and boundary |
How can you tell whether a PUE or WUE claim is meaningful?
A ratio is only interpretable when the quantities and boundaries behind it are disclosed. Ask for the underlying totals as well as the ratio, and check that the measurement period and facility boundary match the comparison being made.
PUE: identify the energy boundary
Power Usage Effectiveness (PUE) compares total data-center energy with IT equipment energy. Ask which meters and loads are included in each quantity, how the figures were measured, and what period they cover. A PUE figure does not tell you the site’s total electricity use by itself: a very large facility can have a favorable ratio and still draw substantial power. Compare PUE values only when their definitions and measurement boundaries are sufficiently alike.
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WUE: identify the water numerator
Water Usage Effectiveness (WUE) is commonly expressed as annual site water use divided by annual IT equipment energy, in liters per kilowatt-hour (L/kWh). Ask whether the numerator includes all water input at the data-center boundary, whether potable water is reported separately, and how the IT energy denominator was measured. The EU’s Commission Delegated Regulation (EU) 2024/1364 provides a reporting model that distinguishes total water input at the data-center boundary from potable-water input for facilities covered by its rules. Check the regulation’s current application and any amendments before treating those categories as an obligation for a particular site.
WUE is not a water-availability test. A favorable WUE does not establish that a supplier, watershed, or aquifer can serve the facility’s absolute demand, especially during a dry or high-demand period. The same caution applies to PUE and grid capacity: an efficiency measure is not proof of local resource adequacy.
Will the project strain the local grid, and who pays for upgrades?
A developer’s statement that power is “secured” is not, on its own, evidence that the grid can reliably deliver the project’s load. It could refer to a contract, a place in an interconnection queue, a planned supply arrangement, or physical capacity. Ask which meaning applies and seek utility- or system-planner-backed documentation.
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Request evidence of the connection path
Ask the utility or relevant system planner for information on available capacity, load studies, interconnection milestones, and the conditions required for reliable service. Request details of any needed generation, transmission, substation, and distribution work, including its schedule and dependencies. Large, concentrated loads can affect regional grids, and data centers often require continuous firm power; the U.S. Department of Energy’s discussion of data-center electricity demand describes these system-level issues and possible responses. Its general discussion is not evidence that a particular proposal has adequate service.
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Ask which costs are assigned to the project for generation, transmission, substations, distribution, and other grid upgrades. Then ask whether any project-driven costs could be recovered from other customers, and what tariff, contract, or regulatory process governs that allocation. Canada’s Responsible Data Centre Development Principles call for proponents to pay project-attributable service and infrastructure costs and say projects should not compromise reliability. Those are Canadian policy principles, not a universal legal rule; identify the governing jurisdiction before describing them as binding requirements.
Separate commitments from possibilities
If the proposal cites batteries, on-site generation, demand response, or flexible computing, ask what is actually committed, when it will be available, and how performance will be verified. Distinguish a tested, contractually available grid service from an aspiration or future option. The Department of Energy identifies clean generation, storage, efficiency, demand resources, and grid expansion as potential ways to manage demand growth, but naming an option does not show that it will be built or that it resolves this project’s capacity and reliability needs.
Can the local water system serve the proposal?
Ask the water supplier or relevant authority to confirm the source, volume, timing, and conditions of service. A developer forecast describes intended use; it does not establish that the allocation is permitted, that treatment and delivery capacity exist, or that water will be available during a drought or peak season.
Check supply, drought, and competing needs
Determine whether the proposed supply is municipal, groundwater, surface water, reclaimed water, or a combination. Ask whether the relevant water rights or allocations are in place where applicable, whether supply is available at peak season, what drought restrictions could apply, and how the proposal fits local watershed or aquifer conditions. Canada’s principles call for freshwater use to be minimized in light of local resource constraints and for transparent, measurable reporting; their policy scope is Canada.
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Check treatment, wastewater, and stormwater
Ask the supplier and local authorities whether treatment and delivery systems can handle the proposed demand, and whether wastewater facilities can accept the project’s discharge. Request expected wastewater volumes and characteristics, reuse plans, applicable permits, and information on stormwater management. The water and wastewater review should cover the infrastructure and permits relevant to the site, rather than treating the amount delivered to the fence as the whole local impact.
Pennsylvania’s announced GRID reporting process names prior-calendar-year total water consumption and maximum-day demand among its measures. That announcement describes a state process; check the operative executive order and implementing instruments for current obligations. Do not assume Pennsylvania’s reporting approach applies elsewhere.
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Does water-efficient cooling use more electricity?
It can. Cooling systems trade water use, electricity use, cost, and operating performance differently. Ask the proponent to identify its heat-rejection design and provide estimates for the local climate and proposed workload, including annual and peak conditions.
Understand the main cooling approaches
- Evaporative cooling: Rejects heat through evaporation and requires make-up water. Cooling towers also need blowdown to manage dissolved minerals.
- Dry cooling: Can reduce direct on-site evaporative water use but may require more electricity. The U.S. Department of Energy’s Federal Energy Management Program (FEMP) describes this water-and-energy tradeoff.
- Hybrid or economizer designs: May use different operating modes across seasons and weather. Request estimates that show when each mode is expected to run and the resulting water and electricity demand.
FEMP also discusses operational measures such as temperature and humidity control, hot- and cold-aisle management, air-side and water-side economizing, and cooling-tower management. Their effect depends on climate, equipment, settings, and hours of operation; general guidance is not a guaranteed saving for a particular facility. Side-stream filtration can help a fouled cooling system return toward design performance, but by itself does not reduce water or power use unless cooling demand is also reduced.
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If the question is total environmental impact, the site boundary may not be enough: electricity generation can also consume water. A cooling design that reduces on-site water use while increasing electricity demand can shift part of the water burden to the power system. FEMP describes this operational energy-water tradeoff. State the accounting boundary clearly, and do not add site water and power-system water figures unless the method makes those quantities comparable.
Compare cooling alternatives on annual and peak electricity, annual and peak-day water, potable-water share, local water stress and drought resilience, reliability, emissions and generation mix, wastewater burden, cost responsibility, and whether commitments can be independently checked. No single ratio resolves those tradeoffs.
What documents and answers should a reviewer request?
Use this checklist to turn broad claims into information that can be checked against utility plans, supplier records, permits, and local conditions:
- Separate IT power demand, total facility peak demand, annual total energy, and annual IT energy, with units, project phase, forecast assumptions, and measurement boundaries.
- Annual and maximum-day water input, potable-water input, source categories, cooling make-up, blowdown, other uses, wastewater discharge or reuse, and the measurement boundary.
- PUE and WUE definitions, measurement points, reporting periods, and disclosed numerators and denominators, alongside the underlying absolute totals.
- Cooling-system type, design conditions, weather and workload assumptions, backup equipment, and sensitivity analysis for hot or dry periods.
- Utility confirmation of capacity and interconnection milestones, required system upgrades, reliability conditions, project schedule, and cost allocation.
- Water-supplier confirmation, relevant water rights or allocations, watershed or aquifer conditions, drought rules, treatment and wastewater capacity, stormwater plans, and applicable permits.
- A commitment to annual reporting and independently verifiable monitoring, including who measures each quantity and where the records will be made available.
The EU regulation supplies measurement categories and recordkeeping rules for data centers covered by its scope. Canada’s principles call for clear, project-appropriate, independently verifiable information. These are useful disclosure references, but their legal applicability depends on jurisdiction and current rules.
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How should you judge the proposal overall?
Assess whether the project’s full demand can be served at the proposed location and on its stated schedule, not just whether its efficiency ratios look favorable. A credible assessment connects the developer’s phase-by-phase forecasts to utility and water-supplier evidence, local infrastructure requirements, permits, cost responsibility, and the conditions under which the figures can be verified.
No site or jurisdiction is specified here, so there is no defensible project-specific conclusion about demand, available grid capacity, water scarcity, permit thresholds, or approval. Those answers require the proposal’s documents and local evidence; national or global sector estimates cannot substitute for them.
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