Water availability alone doesn’t determine whether a potential data center site can support long-term operations and water use. Certainly, the amount of water needed for cooling and operations is top priority when selecting a location. But as the demand for hyperscale and AI-driven data centers continue to rise, developers must evaluate a second challenge early on: whether nearby waterways have the capacity and can legally receive discharged cooling water.
Federal, state and local regulatory requirements will come into play. Often, water discharge constraints can be easily identified before even securing a site or locking in engineering designs. That early insight can reduce redesign risk, improve schedule certainty and help teams compare sites based on long-term operational feasibility.
Many data centers today use water-based cooling systems because it’s more energy efficient compared to air cooling methods. While the amount of water withdrawn, the amount of water consumed and how that water is released back into the environment is dependent on the design of the data center’s cooling system, when a data center uses water for cooling, it also produces a substantial amount of thermal wastewater.
To properly manage that wastewater, we turn to the Clean Water Act (CWA). As the primary federal law in the United States governing water pollution and surface water quality, it establishes the basic structure to regulating discharges of pollutants into the waters of the United States and the quality standards for surface waters.
Data center developers are typically already familiar with Section 404 of the Clean Water Act that protects wetlands and requires wetland jurisdictional determinations and permitting. I’ll keep the focus of this article on water discharges and the associated regulatory requirements.
The Clean Water Act Section 402 created the National Pollutant Discharge Elimination System (NPDES), which requires permits for any type of pollutant discharge from a point source into waters of the United States. It contains limits on what can be discharged, requirements for monitoring and reporting, and other provisions to ensure that any discharges don’t harm people or the environment.
Under the Clean Water Act, heat is regulated as a pollutant. For data centers using water-based cooling systems, this can be one of the most technically complex aspects of NPDES permitting.
Section 316(a) requires facilities to demonstrate that thermal discharges will protect aquatic life. Understanding and mitigating how thermal discharges impact the relevant aquatic species is key to obtaining a NPDES permit. A data center facility must provide comprehensive biological and ecological studies to prove that the warmer temperatures of the discharge will not adversely impact the local ecosystem, especially the resident fish and benthic macroinvertebrate community which often includes freshwater mussels. Many receiving streams also support threatened or endangered species which require protection under Section 7 of the Endangered Species Act.
We typically approach thermal modeling of discharges in three ways:
As data center development accelerates, water strategy and permitting strategy cannot operate independently. A site with sufficient water supply may still face significant operational or regulatory constraints if receiving waters cannot accommodate thermal discharges, requiring time that is not built into the project timeline.
Early evaluation of discharge feasibility, aquatic ecosystem and use designation and thermal assimilative capacity gives developers a clearer understanding of long-term site viability before major investments are made. It also creates opportunities to align cooling system design, permitting strategy and operational resilience from the beginning of the project lifecycle.
The most successful projects increasingly treat aquatic ecology and water permitting as strategic inputs to development, not downstream compliance requirements.
Jamie Krejsa has more than 30 years of experience as an aquatic ecologist working on complex natural resource projects, including those requiring NPDES permits. He has extensive experience in environmental planning, permitting and compliance, including endangered species issues and biological evaluations that are directly connected to construction projects, intake structures and thermal variances (316a & 316b) of industrial outfalls.
