AI data centre boom triggers global disputes over power and water

Artificial intelligence (AI) is now growing rapidly, forcing the accelerated construction of enormous data centres, large-scale facilities for processing and storing vast volumes of data, around the world.

But data centres also consume large amounts of electricity and water, prompting residents in many countries to oppose them over fears of higher power bills and environmental damage.

Energy crisis and soaring cost of living

A single large data centre can use as much electricity as millions of homes, exceeding what power grids can handle and rapidly pushing up electricity bills for the public.

Technology companies also receive tax incentives, while residents are left bearing higher living costs and squeezed access to resources, leading to protests in several US states, including Michigan and Virginia.

The situation in Australia is also tense.

City councils in Sydney have raised concerns that the industry’s expansion could cause brownouts or blackouts.

Reports say power disruptions in Lane Cove West have continued to increase since data centres expanded in the area, while there are also concerns that their arrival will block opportunities to use energy for other infrastructure that people need.

Denmark, a destination for data centre investment because of its large supply of renewable energy, has also had to slow the construction of such centres.

Grid operator Energinet temporarily suspended electricity connections for new projects after finding that power demand requests had surged to several times more than the system could support.

Demand from data centres alone accounts for nearly 25% of all projects waiting to be connected in the country.

The tension has been described as a “Hunger Games-style energy policy”, a contest between the technology industry, other businesses and household users for limited electricity resources.

Denmark’s energy minister has proposed setting priorities, possibly putting domestic customers first and placing data centres near the back of the queue.

In the European Union, the European Commission aims to triple data centre capacity within the next seven years to compete with the United States and China.

But the plan may not be possible because Europe’s power grids were not designed to support electricity use on this scale.

In Ireland, for example, data centres used more electricity than all urban households in the country combined in 2024.

Ultimately, the key argument is about fairness in sharing resources.

Opponents ask why surplus energy that should belong to the public is instead being used to serve an industry that benefits only a limited group of people.

The ability of data centres to bid against other consumers for power has become an unavoidable threat to energy supply security and household price stability.

Environmental problems

Beyond energy, the huge volumes of water used to cool servers have become a major trigger for community opposition around the world.

Hyperscale data centres require large and continuous water supplies, which can worsen problems in areas already facing shortages because of climate disruption.

The Anacé Indigenous people in Brazil oppose TikTok’s planned data centre project on the country’s north-eastern coast because residents fear it will compete for water resources in an area already facing repeated droughts.

Paulo Anacé, a community leader, asked: “How can you have a data centre that uses thousands of litres of water when people in the same area still have no water to use, and power cuts happen every week?”

Although the developer in Brazil has claimed it uses an efficient water recycling system that will not affect the community, the reality has been different.

At the start of construction, water trucks were brought in to draw water from a lake used by residents for washing clothes and fishing, causing strong local anger.

Brazilian prosecutors were then forced to examine the construction permit process, amid concerns that it appeared rushed and neglected the real environmental impact.

In Spain, the campaign group “Tu Nube Seca Mi Río” is fighting in the Aragón region, one of Europe’s driest areas, where the government has approved many hyperscale data centre projects despite farmers having to seek subsidies because crops have died in droughts.

Protesters believe their area is being turned into a “sacrifice zone” so that people elsewhere can access digital technology at the cost of their natural resources.

Data centres have become an obstacle to Sydney’s urban development in Australia.

Water use by data centres is expected to account for 25% of the city’s total water consumption by 2035, equivalent to the entire output of a desalination plant.

This rising water demand has also delayed several housing projects because the water supply system cannot keep up with rapidly growing demand.

The destruction of farmland is unacceptable to many communities.

In Italy, the group “Guardians of the Territory” in Lombardy opposes Microsoft’s data centre project, saying it would not only destroy agricultural land but also permanently seal the soil and damage ecological continuity, causing irreversible harm.

Similarly, in India, farmers in Andhra Pradesh and Telangana, both important agricultural areas, have gathered to oppose data centre construction because they say they are being pressured to sell farmland, including paddy fields and mango orchards, for data centre development.

The land acquisition and consolidation process has also been criticised as lacking transparency, being shrouded in secrecy and excluding local administrative bodies and communities from decision-making.

According to POLITICO, about 50% of data centres in Europe do not meet key energy efficiency standards, meaning large amounts of electricity are lost to cooling and infrastructure rather than processing, while about 20% perform very poorly compared with modern standards.

In addition, the use of backup power from diesel generators at data centres affects air quality and the health of people living nearby.

Policy and legal battles

Growing social resistance has led to laws and control measures in many countries.

The US state of Maine became the first state to pass a law temporarily suspending the construction of new data centres across the state for 18 months.

The measure was intended to give state agencies time to study and assess the impact on water resources, electricity and household power bills before taking further action.

In addition, Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez have proposed a nationwide temporary moratorium on data centres.

The bill aims to give Congress time to study the effects of expanding this infrastructure in depth and to pressure the industry into accepting tougher safety and environmental regulations.

Policy changes also include cancelling tax incentives that once encouraged developers to invest.

Maine and Georgia have begun considering and passing laws to restrict tax exemptions for data centres after finding they are not worth the resources lost.

Academics say scrapping these incentives is an important step in blocking irresponsible development that burdens public budgets.

Germany, meanwhile, has introduced an energy efficiency law requiring new data centres to use 100% renewable energy from 2027 and to have strict energy management systems.

The European Union has also begun requiring data centres to report key performance indicators (KPIs) to a central database to improve transparency and allow more effective scrutiny of water and electricity use.

Ireland previously ordered a halt to data centre construction, but has now begun easing restrictions under very strict conditions.

Developers must guarantee that they can generate their own electricity at certain times or invest directly in renewable energy, showing that data centres must come with responsibility towards the wider system.

In Australia, city councils have called on New South Wales to suspend approval for projects worth more than 41 billion dollars until clear rules are in place.

They have also proposed a “user-pays model”, requiring technology companies to bear the full cost of upgrading electricity and water infrastructure themselves so that the burden does not fall on taxpayers and ordinary households.

Sydney has also proposed that data centres must be “grid-positive”, requiring direct investment in wind, solar and battery storage projects.

These requirements aim to change data centres from resource-draining users into participants that help strengthen the city’s energy and environmental security.

Social responsibility

The technology industry often claims that data centres create jobs and stimulate local economies, but experts and residents see this as an “unfulfilled promise”.

After construction is completed, data centres employ only 20-50 permanent staff because they are server warehouses, not offices for software developers.

In addition, deal-making is often conducted in secret through non-disclosure agreements (NDAs), excluding communities from decision-making.

Even local mayors have learned about data centre projects from the media only after contracts had already been signed.

This lack of transparency has fuelled anger and led to opposition from both liberals and conservatives.

This fight is seen as being not only about stopping construction, but also about people’s rights and participation in shaping the future of their communities.

Opposition to data centres is a channel through which residents can express dissatisfaction with domination by technology giants.

Academic Holly Buck wants to see AI development placed under democratic governance.

At present, companies can make secret deals and have enough money to make everything easy, but if people organise protests to stop data centres from being built, they can create leverage and bring about change.

From the perspective of those affected, technology does not always mean progress.

It can also come with the destruction of the foundations of life.

Sustainable development must therefore ensure that communities have fair access to basic resources, rather than prioritising the profits of technology companies.

At this point, the data centre industry can no longer expand without limits.

Technology companies must adapt to communities, accept stricter social and environmental rules and take a high level of social responsibility.

No matter how far technology advances, those successes will have no value if they come at the cost of environmental disaster and living costs so high that people can no longer bear them.