WITH MORE THAN A DOZEN data center projects taking shape in Santa Clara County, local leaders have offered assurances that potential environmental impacts will be thoroughly assessed before any new facility gets switched on. But when it comes to water usage, a group of Bay Area researchers is warning such environmental reviews have an alarming number of blind spots.

In a report released Thursday, researchers with Santa Clara University and San Francisco-based policy nonprofit Next 10 conducted a comprehensive statewide survey of data centers, amid a rapid AI-fueled buildout that has led to concerns about potential strains on utilities, such as power and water. The report found that spotty legal requirements for environmental review make it difficult to predict the potential impact of new data centers on the state’s water system.

In the South Bay, which already has the densest collection of data centers of any region in the state, the lack of clarity could hamper local planners’ ability to navigate unpredictable environmental challenges, such as climate change and drought.

The researchers are recommending the state strengthen its requirements for such reviews.

“The accelerated concentration of these AI data centers and the plan to build them has put an increased pressure on the water planners to get a better handle on what they’re actually getting into,” Iris Stewart-Frey, a professor of environmental science in the Department of Environmental Studies and Sciences at Santa Clara University, told San José Spotlight.

Many data centers use water to cool sensitive electronic equipment, though the quantity varies widely between facilities — from virtually none to the equivalent usage of thousands of households. The report’s authors said they reached out to every water provider in water districts where data centers are located, but none provided data about water use, either for individual developments or for the cumulative usage of such projects.

The report, which assessed both water scarcity and “social vulnerability” in communities surrounding data centers, determined that on many fronts, the South Bay stands on firmer footing than other regions in the state where major data center buildouts are taking place.

Water consumption data often obscured

Increasingly, data center developers are turning to rural communities for such projects — areas where water supplies are often especially scarce. In contrast, Silicon Valley, which has been a hot spot for data center development for decades, enjoys a relatively stable supply of water, though it does rely on imported water to supplement local sources. In addition, environmental review information for data center projects in the region is considerably easier to come by than elsewhere, the report found.

Even so, local reporting leaves many glaring omissions. While many environmental reviews for data center projects include estimated projections about their future water use, data center operators typically do not publicly report actual water usage once the facilities are up and running.

Without such data to provide baseline information on water consumption, it’s difficult to assess the accuracy of the projections companies provide, the report’s authors wrote. Meanwhile, environmental reviews also tend to withhold other key information about data center projects, such as the type of cooling systems they use and whether they will use potable or recycled water.

“We don’t know what strain we’re putting on the environment where we already have a lot of uncertainty about how the climate is changing, not only in Santa Clara County, but where we’re actually getting the water from, which is the Sierra Nevada.”
Iris Stewart-Frey, environmental science professor

“We don’t know what strain we’re putting on the environment where we already have a lot of uncertainty about how the climate is changing, not only in Santa Clara County, but where we’re actually getting the water from, which is the Sierra Nevada,” Stewart-Frey said.

The researchers tallied about 80 data centers in operation in Santa Clara County, with the majority located in Santa Clara. Another 16 projects are set to be developed in the coming years, they found.

San Jose’s plans to support an expansion of new data centers will capitalize on two separate transmission line projects set to bring 2,000 megawatts of increased power capacity to the South Bay. But even with the added power, this effort has faced pushback from residents, who have demanded more answers about the potential impacts on the city’s electrical and water systems. Meanwhile, Santa Clara officials last year said they’ve had to turn away new data centers because the city has run up against the limits of its own grid’s capacity.

‘We want transparency’

“What residents are asking for is not complicated,” Ellina Yin, a San Jose resident who has organized a vocal opposition movement against the city’s data center plans, told San José Spotlight. “We want transparency about what is being approved, real public engagement that matches the scale of these projects, cumulative environmental and water impact assessments and enforceable protections around water use and pollution before more approvals move forward.”

San José Spotlight reached out to San Jose and Santa Clara to ask how they are monitoring potential impacts from data centers on their water systems. Representatives for each city said they have rigorous review processes in place.

“In San Jose, all data center projects are required to complete a water assessment, so projected water demand and available supply are examined as part of the planning process,” Erica Garaffo, who works in the City Manager’s Office on projects involving heavy power users, told San José Spotlight.

State lawmakers are considering a variety of proposed laws aimed at stiffening oversight of data centers, including measures that would strengthen reporting requirements for water usage. But Ahmad Thomas, CEO of the Silicon Valley Leadership Group, warned that over-regulating the burgeoning artificial intelligence industry could undermine a sector that has propped up California’s innovation economy.

“A one-size-fits-all approach risks constraining innovation without giving policymakers the broader context they need to manage water resources effectively,” Thomas told San José Spotlight.

Contact Keith Menconi at keith@sanjosespotlight.com or @KeithMenconi on X.

Editor’s note: Ahmad Thomas sits on San José Spotlight’s advisory board. 

This story originally appeared in San Jose Spotlight.