Friday, July 31, 2026
As Artificial Intelligence (AI) expands rapidly across North America, the vast energy and water footprint required to cool high-density data centres has sparked widespread debate. Across many watersheds, these facilities are drawing heavily on municipal drinking water supplies, a practice that places increasing pressure on local infrastructure already challenged by climate change and aging assets.
Yet, where many see a crisis, Soula Chronopoulos sees an opportunity for innovation. As president of AquaAction, a Canadian non-profit dedicated to fostering water tech innovation, supporting entrepreneurs, and building strategic partnerships across Canada and the United States, Chronopoulos takes a uniquely optimistic view. Rather than viewing data centres as an inevitable drain on local resources, she argues that with the right combination of circular policy, local climate utilization, and courage from water managers and developers, the AI buildout can actually become a catalyst for positive water stewardship.
Water Canada sat down with Chronopoulos to discuss alternative cooling, Canadian climate advantages, and how municipalities can rethink data centre integration.
Water Canada: Why do high-density data centres rely so heavily on water for cooling in the first place, and what is the status quo method most facilities use today?
Chronopoulos: Data centres and the energy and water demand that comes from them are coming whether we like it or not. The choices we make right now are how the industry will build its social license. Through innovation and intelligent design, we can reduce that footprint enormously.
The reason water shows up in data centres at all is forced evaporation. Servers generate an enormous amount of heat, and the cheapest way to remove that heat is to evaporate water so it carries the heat away with it. Most cooling towers do that today: municipal water (which is paid for and treated) runs through the system, a portion evaporates and is gone from the watershed for good, and the rest returns as blowdown containing dissolved solids that must be treated or discharged.
What most people don’t realize is that 80 to 90 per cent of the water going through these systems is treated, potable municipal supply. Facilities are pulling directly from the same system that serves people’s taps, fire protection, and agriculture, and we are losing it to the air. The status quo is not going to work, but it is solvable if we establish proper policies.
Water Canada: When we talk about alternative cooling, we’re looking at a spectrum of options—from direct-to-chip liquid cooling and immersion tanks to air-side economizers and closed-loop systems. What technologies show the most promise for reducing freshwater dependence?
Chronopoulos: Direct-to-chip liquid cooling and immersion cooling both move heat away with far less water than traditional cooling towers because the fluid stays largely in a closed loop rather than evaporating. At the site level, air-side economizers that recirculate fluid instead of continuously drawing from fresh supply are very promising wherever the climate allows.
None of this is waiting on a technology breakthrough. Every single one of these approaches is operating today. The gap is adoption, not invention. We feel we have to go out and invent solutions, but a lot of this has already been solved. It is simply a question of courage to adopt them.
Water Canada: From a watershed management perspective, why is using treated municipal water for industrial server cooling such a critical threat?
Chronopoulos: Groundwater is our insurance, and much of the world’s groundwater is being rapidly depleted. In regions like the Prairies or out West, water capacity (not power) is often the immediate constraint.
This issue keeps getting framed as an energy story with water as a footnote. From a watershed standpoint, that is completely backwards. Water runs 60 per cent of our GDP, yet we treat it as an afterthought. It is a critical threat to use potable supply for cooling when communities rely on that same water for basic needs and food production.
However, this is where Canada has a real, unused advantage. We live in a cold climate that allows for free-air cooling most of the year, cutting the need for evaporative water loss. Look at QScale’s Q01 campus in Lévis, Quebec. They run on Hydro-Québec’s grid, get free cooling roughly 80 per cent of the year due to local climate, and partner with Énergir to recover waste heat to warm greenhouses producing 80,000 tons of food per year. That is a primary example of leveraging climate to reduce water footprints while positively impacting agriculture.
Another option is underground or in-mountain siting. Building into rock offers stable, cool temperatures year-round with zero evaporative water loss. Nordic countries and parts of Europe are doing this. The climate advantage exists here; we just need to incorporate it into our policy frameworks.
Water Canada: What about circular cooling methods like snow-based systems? How realistic are those for Canadian municipalities?
Chronopoulos: Look at the White Data Center project in Bibai, Japan. The city was spending roughly 400 million yen annually to haul away heavy snowfall. Instead, they began storing snow in an insulated mound outside the facility. Heat from the servers slowly melts the snow, and that meltwater cools pipes of antifreeze circulating through the building. They cut energy costs by half and substituted an evaporative cooling tower with a closed-loop, non-evaporative winter source.
That is entirely realistic for Canada. Anywhere that spends a significant municipal budget clearing heavy snowfall (like Montreal) is a candidate. You aren’t creating new costs; you’re simply redirecting existing resources.
Water Canada: If snow isn’t an option for every region, treated wastewater effluent or greywater is another candidate. What main barriers stop data centres from tapping into treated wastewater instead of drinking water?
Chronopoulos: First, most provinces lack a clear, standardized permitting pathway for data centres to draw reclaimed water for cooling. Developers default to municipal drinking water hookups because it is a known, low-friction pathway.
Technically, reclaimed water requires careful pathogen monitoring and treatment to prevent risks like Legionella in cooling systems, as well as managing dissolved solids in blowdown streams. Innovators in the Canadian water tech ecosystem have already solved these monitoring and treatment challenges. But as long as standard municipal hookups remain cheap and easy, developers will default to them until policy makes the alternative payoff.
Water Canada: Data centres are traditionally evaluated by energy grids, while water reporting remains inconsistent. What specific water-use metrics should be required?
Chronopoulos: Sub-metering must come first. You cannot manage what you do not measure. Right now, many facilities face no requirement to meter their water use.
Beyond sub-metering, mandatory metrics should include:
- WUE (Water Usage Effectiveness): Measuring liters used per kilowatt-hour.
- Water Source Transparency: Disclosing whether intake is potable, reclaimed, stormwater, or groundwater.
- Water Balance Reporting: Evaluating facility draw against the capacity of the local watershed.
- Discharge Quality: Tracking cooling blowdown chemistry to protect downstream ecosystems.
We need policies establishing that if you want to build a data centre, you must start with a plan that includes circularity and community benefit.
Water Canada: How can Canadian municipalities incentivize developers to build around local climate realities rather than defaulting to standard pipe hookups?
Chronopoulos: Municipalities can offer faster permitting for developers who submit verified circularity plans, or provide targeted incentives for waste heat partnerships with district energy or agriculture.
When municipalities reward circularity, they aren’t just protecting the watershed, they’re spurring design innovation so that data centres can become a force for good.
Water Canada: How should the federal government reconcile its heavy investments in AI infrastructure with strained local water systems?
Chronopoulos: Governments often treat AI ambition and water security as two separate files, but they are deeply intertwined. If public funding is directed toward AI infrastructure, that funding must come with water circularity conditions before anyone breaks ground: mandatory metering, a verified water balance, and a clear circularity plan.
Data centre growth alongside extreme weather is a national water security issue.
Look at international models: Meta’s facility in Kuna, Idaho, invested in a wastewater treatment system for the city, allowing spent cooling water to irrigate non-edible local crops. On the intake side, technologies capturing rainwater can feed cooling systems with low-mineral water that is actually more efficient than standard municipal draw.
Humanity is at its most ingenious when our backs are against the wall. The technical solutions to these water challenges already exist—it is now a matter of policy, adoption, and having the courage to lead.
This article is the third in a series of interviews that Water Canada is conducting with data centre experts this summer. Check out previous articles below:
Q&A: Dr. Anne Pasek pulls back the curtain on data centre water demands
Hamilton Council rejects landmark data centre pause, but “the work will still go ahead”
