How are Companies Pioneering Data Centre Zero Water Cooling?
As data centres scale to meet the demands of AI and cloud computing, their environmental impact - especially water consumption - is under increasing scrutiny.
Traditional evaporative cooling methods can consume up to 1.5 million litres of water per day per hyperscale data centre, straining resources in water-stressed regions.
In response, leading technology companies are pioneering zero-water cooling through closed-loop and immersion cooling innovations that dramatically cut water use while maintaining high-performance standards.
The shift to zero water cooling
Data centre cooling has long relied on open-loop water systems, where water is evaporated to remove heat from equipment.
While effective, this approach is unsustainable in the face of rising temperatures, climate-driven droughts and growing global water scarcity.
The industry’s transition to mechanical, water-free cooling marks a crucial turning point in sustainable infrastructure design.
In August 2024, Microsoft began deploying a new closed-loop, chip-level cooling system that virtually eliminates evaporative water use.
Once filled during construction, the system continuously recirculates coolant without requiring additional water, saving more than 125 million litres per data centre annually.
This innovation builds on Microsoft’s earlier gains in water efficiency.
Between 2021 and 2024, the company reduced its Water Usage Effectiveness (WUE) from 0.49 L/kWh to 0.30 L/kWh, with further improvements targeted as the technology scales.
Pilot deployments are underway in Phoenix, Arizona and Mt. Pleasant, Wisconsin, with all new data centre projects moving to zero-water designs from August 2024 onwards.
Beyond water conservation, this system enhances precision thermal management at the chip level, supporting the cooling needs of high-density AI workloads while eliminating reliance on local water infrastructure.
Closed-loop liquid cooling
Microsoft is spearheading the move toward closed-loop liquid cooling, a system where coolant circulates in a sealed environment between servers and chillers.
Once filled during construction, the loop requires no additional water input, preventing both evaporation and consumption.
This design enables precise chip-level temperature regulation while entirely bypassing municipal water systems.
“These new liquid cooling technologies are designed to circulate water within a closed network," says Steve Solomon, Vice President of Data Centre Infrastructure Engineering at Microsoft.
"Once the initial setup is complete, the system operates independently, dissipating heat efficiently without additional water intake.”
Since deploying this system, Microsoft has reported an 80% improvement in Water Usage Effectiveness (WUE) compared to earlier data centres.
The company is set to pilot the technology in Arizona and Wisconsin by 2026, aiming to scale it across its global infrastructure portfolio.
Singapore-based Evolution Data Centres is leading efforts in Southeast Asia by deploying fully air-cooled, closed-loop systems that require no evaporative water.
Designed to operate reliably in hot, humid climates, these systems support energy efficiency without relying on local water sources, making them ideal for regions facing growing urban and digital infrastructure needs.
Immersion cooling
Specialist firms such as LiquidStack and Iceotope are advancing immersion cooling, where servers are submerged in engineered, non-conductive fluids.
These fluids absorb heat directly and either passively circulate or use a two-phase process: evaporating to carry heat away and condensing for reuse – no pumps, no fans, no water.
This method excels in high-density environments like AI training clusters, achieving cooling energy reductions of more than 90%.
“Data centre operators recognise the benefits of liquid cooling but need assurance around long-term fluid management,” says Peter Huang, Global Vice President of Data Centre Thermal Management at Castrol.
“Castrol has delivered fluid services for the automotive industry for decades – we're now bringing this proven expertise to data centres with a service model that supports optimal performance throughout the entire lifecycle.”
It's also silent, compact and modular, making it a viable solution for edge deployments and retrofits.
Hybrid solutions
In collaboration with Vertiv, Bridge Data Centres and Chindata Group have developed X-Cooling, a waterless system that uses advanced thermal controls and ambient air to regulate temperatures in hyperscale data centres.
The system achieves zero WUE and boasts a partial PUE under 1.1, combining sustainability with operational efficiency.
In Hebei Province, China, switching to X-Cooling is projected to save up to 1.2 million tons of water per 100 MW annually, marking one of the largest water conservation impacts in the industry to date.
Vertiv’s Liebert XDU represents a hybrid model, combining closed-loop liquid cooling with air-based support for lighter loads.
It recycles coolant internally and captures waste heat, sometimes repurposing it for district heating.
These systems provide a bridge for data centres transitioning from legacy infrastructure toward fully water-free operations.
Environmental impact and industry metrics
The cumulative impact of these innovations is substantial:
- Annual water savings of more than 125 million litres per data centre.
- Drastic reductions in WUE, with near-zero usage now achievable.
- Better alignment with sustainability targets, especially in regions under water stress.
- Improved Power Usage Effectiveness (PUE), as the ability to operate at higher temperatures enables the use of more efficient chillers.
Microsoft’s investment in zero-water cooling is not just about operational efficiency.
The shift from water-intensive evaporative cooling to closed-loop and immersion-based solutions reflects a broader industry reckoning with climate risks and resource scarcity.
With companies like Microsoft, Chindata, Bridge Data Centres, Evolution DC, Vertiv, Iceotope and LiquidStack leading the way, data centre cooling is entering a new era, one that prioritises sustainability, innovation and resilience.
