Margaret Cook, PhD, Vice President of Water and Community Resilience
If you ask state and local leaders about the data center boom sweeping Texas, they’ll talk about jobs, tax revenues, and the chance to anchor the digital economy of the future. They’re less eager to talk about the enormous stress these facilities will place on the state’s already strained energy and water systems.
The data centers’ appetite for energy has already garnered mainstream attention. But their water demand is just now coming into focus.
HARC’s new white paper, Thirsty Data and the Lone Star State: The Impact of Data Center Growth on Texas’ Water Supply, makes one simple fact clear. When it comes to data centers, we have to talk about water.
Data centers are the beating heart of artificial intelligence, cloud computing, and modern commerce. But they are also among the most resource-hungry facilities ever built. A single site can consume as much electricity as an entire town, along with vast quantities of water to generate that power and keep the servers cool. For Texas, a state already facing recurring droughts, rapid population growth, and a 4.8 million acre-foot water shortage, the stakes couldn’t be higher.
Texas’ Data Center Boom by the Numbers
As of September 2025, Texas was home to more than 400 data centers, and more are under construction or consideration. They are clustered in major hubs like Dallas–Fort Worth, Houston, Austin, San Antonio, and West Texas.
The growth projections are staggering.
Data centers in Texas already require more than 9,500 megawatts (MW) of electricity. By 2030, ERCOT forecasts demand could reach 77,965 MW – an eightfold increase. For perspective, that’s close to the entire generating capacity Texas needs to serve its residents during summer peak. (Note: ERCOT revised its original 77,965 MW number downward to 22,175. Our paper addresses this range to calculate water impact.)
At the same time, Texas data centers today consume an estimated 25 billion gallons of water per year. By 2030, that number could rise to nearly 29-161 billion gallons annually, or up to 2.7% of the state’s total annual water use – enough water to fill the Cowboys’ AT&T Stadium more than 200 times.
Why Texas Water Planning Falls Short
Despite the enormous implications, Texas’ State Water Plan does not currently account for data center growth. That means the state’s primary tool for funding new water projects is blind to one of the fastest-growing sources of water demand.
The problem is structural: the plan looks backward, relying on historical use data rather than forecasting new industries. As a result, water needs tied to data centers won’t appear in official state planning documents until years after facilities are already online. Local communities, meanwhile, are left scrambling to secure water supplies without the time, funding, or authority to respond.
On the energy side, ERCOT has begun developing processes to manage large load interconnections from data centers. But no parallel process exists for water planning. This leaves cities and utilities with limited options to balance these new demands against the needs of their residents and industries.
A Call for Modernized Planning
The resource footprint of data centers is not a future challenge – it is already here and growing rapidly. To address this challenge, our report includes recommendations for modernizing Texas’ water planning process.
Better data – The state should require large users, such as data centers, to report their expected and actual electricity and water use. Transparency is essential for local and regional leaders to make informed decisions.
Inclusion in water planning – The Texas State Water Plan should include trustworthy forecasting for large industrial users, not simply recording their past use.
Efficiency and alternatives – Policymakers should incentivize or require data centers to use energy-lean and water-lean technologies, such as dry cooling and renewable energy, and consider using alternative water supplies, such as reuse or brackish water. Saving energy saves water, too.
Leverage infrastructure investment and public-private solutions – When possible, seek data center investments that serve the local community, too. Utilities and communities should also pursue partnerships with data centers to jointly fund new water supplies that benefit both industry and residents.
The Bottom Line
Texas cannot afford to treat the data center boom as just another chapter in its economic success story. These facilities represent a massive new pressure on water and energy at a time when both are under severe strain. Without forward-looking policies, communities will be forced into reactive, costly, and risky decisions.
Texas can plan now, with foresight and transparency, or struggle later as water scarcity collides with one of the most resource-intensive industries of the 21st century.
Download HARC’s new white paper, Thirsty Data and the Lone Star State: The Impact of Data Center Growth on Texas’ Water Supply.
