Texas data center boom may slash billions of gallons from state water supplies by 2030

A new report from the Houston Advanced Research Center examines how the rapid growth of data centers could affect Texas’s water supply. Titled Thirsty Data and the Lone Star State: The Impact of Data Center Growth on Texas’ Water Supply, the report analyzes existing water use, projected demand, and the degree to which current planning processes account for this expanding sector. Its findings suggest that while data centers are not currently among the state’s largest water users, their growth trajectory presents planning challenges that could intensify existing water scarcity concerns if left unaddressed.

Texas is already contending with recurring droughts, population growth, and rising competition for limited water resources. At the same time, the digital economy has become increasingly dependent on large-scale data centers that require substantial electricity and water to operate. These trends are converging in ways that state and local planners are still working to understand.

Data centers, electricity, and water use

HARC estimates that in 2025, Texas data centers consumed approximately 25 billion gallons of water when both direct and indirect uses are included

As of September 2025, Texas hosts more than 400 data center facilities concentrated primarily in the Dallas Fort Worth region, Houston, San Antonio, Austin, and West Texas. Dozens of additional facilities are under construction or in planning phases. According to the report, existing data centers in the state require approximately 9,567 megawatts of electricity, an amount comparable to the power demand of several large cities combined.

Electricity demand is central to understanding data center water use. Water is required not only for cooling servers inside data centers but also for generating the electricity that powers them. This creates both direct water use at the facility level and indirect water use at power plants. The magnitude of total water consumption depends on several factors, including facility size, cooling technology, operating intensity, and the source of electricity.

HARC estimates that in 2025, Texas data centers consumed approximately 25 billion gallons of water when both direct and indirect uses are included. This represents about 0.4 percent of total statewide water use. While relatively small at the state level, this consumption is concentrated in specific regions and watersheds, many of which already experience water stress.

Looking ahead to 2030, the report estimates that data center water consumption in Texas could rise to between 29 billion and 161 billion gallons annually

Cooling technologies play a significant role in shaping water demand. Some data centers rely on water-cooled chillers or cooling towers that consume water through evaporation. Others use air-based or dry cooling systems that significantly reduce onsite water consumption but require more electricity. Because electricity generation itself often requires water, especially at thermoelectric power plants, reducing water use at the data center does not always reduce total water demand. In some cases, it can increase it.

The report notes that water use for cooling data centers is expected to increase nationally in the coming years. In Texas, where more than 80 percent of the state experienced drought conditions in 2025, even incremental increases in demand can have meaningful local effects. These effects are particularly pronounced during periods of high heat, when water supplies are constrained and electricity demand peaks.

Looking ahead to 2030, the report estimates that data center water consumption in Texas could rise to between 29 billion and 161 billion gallons annually. This range reflects uncertainty in electricity demand forecasts, the pace of data center construction, and future choices about cooling systems and power supplies. At the high end of the estimate, data center growth could increase total statewide water demand by as much as 10 percent compared to current planning assumptions.

Planning challenges and policy implications

One of the report’s central conclusions is that Texas’s water planning framework is not well aligned with the speed and scale of data center growth. The State Water Plan, which guides long-term water supply development and funding, relies heavily on historical water use data. As a result, new and rapidly expanding industries may not be reflected in official demand projections until years after facilities begin operating.

Because the State Water Plan is updated every five years, data centers that began operations in 2025 will not be fully incorporated into statewide water demand estimates until the next planning cycle. This delay limits the ability of communities to anticipate infrastructure needs, request funding, and develop new supplies in advance of demand.

The report also highlights limited transparency around data center water use. Unlike some other large industrial water users, data centers are not consistently required to disclose detailed information about their water consumption, cooling technologies, or future expansion plans. This lack of data complicates efforts by state agencies, regional planners, and local utilities to assess cumulative impacts or plan for growth.

Electricity planning offers a contrast. ERCOT has implemented a Large Load Interconnection Process that requires large electricity users, including data centers, to submit detailed information before connecting to the grid. No comparable statewide process exists for large water users. Surface water use is regulated, but groundwater use is governed by a patchwork of local districts with varying authority and rules.

Data centers powered by wind, solar, energy storage, or other low-water technologies can reduce indirect water demand

The report emphasizes that electricity sourcing decisions can significantly influence water outcomes. Data centers powered by wind, solar, energy storage, or other low-water technologies can reduce indirect water demand. Conversely, reliance on water-intensive power generation can amplify total water use even if onsite water consumption is reduced. The analysis shows that energy efficiency improvements often have a larger effect on total water use than changes in cooling technology alone.

Rather than advocating a single policy response, the report outlines a range of options for state and local leaders. These include requiring better disclosure of water and energy use from large facilities, incorporating projected data center demand into water planning, incentivizing water efficient cooling technologies, encouraging the use of alternative water supplies such as treated wastewater or brackish water, and exploring public-private partnerships to fund new infrastructure.