Are Data Centres Fueling a Water Crisis in Drought-Stricken Mexico?

Querétaro, a vibrant colonial city in central Mexico, has emerged as a significant hub for data centres, driven by the growing demand for digital services and artificial intelligence (AI). This transformation is attracting major tech companies and investment, while also raising concerns about water usage and environmental impacts.

Last updated: 27 October 2023 (BST)

Key Takeaways

• Querétaro is Mexico's leading data centre capital, hosting major firms like Microsoft and Amazon Web Services.
• Over $10 billion (£7.4 billion) in investments are expected in the next decade.
• Water consumption by data centres raises sustainability concerns, especially amid recent droughts.
• The region's strategic location offers easy access to power and connectivity, attracting tech firms.
• Local communities are worried about the impact of data centres on water resources and air quality.

The Rise of Querétaro as a Data Centre Hub

Querétaro's transformation from a quaint colonial city to a bustling data centre capital is remarkable. This city is home to an increasing number of data centres owned by tech giants such as Microsoft, Amazon Web Services (AWS), and ODATA. The demand for data storage and processing has surged, primarily due to the rapid growth of AI technologies.

Ascenty, a major player in the data centre sector, operates two large facilities in Querétaro, each spanning around 20,000 square feet, with another facility currently under construction. The company claims to be the largest data centre operator in Latin America, illustrating the scale of operations in the region.

Investment and Growth Forecasts

Investment in Querétaro's data centre infrastructure is projected to exceed $10 billion (£7.4 billion) over the next decade. This influx of capital is largely driven by the rising need for rapid data processing capabilities, particularly as AI applications expand across various sectors.

According to Shaolei Ren, an associate professor at the University of California Riverside, “The demand for AI is accelerating the construction of data centres at an unprecedented speed.” This growth is not limited to Querétaro; similar trends are observed globally as businesses adapt to an increasingly digital landscape.

Strategic Advantages of Querétaro

Querétaro's appeal as a data centre location stems from several strategic advantages:

• Central Location: Positioned in the heart of Mexico, Querétaro provides easy access to major urban centres, including Mexico City.
• Connectivity: The region is well-connected by high-speed data cables, allowing for the swift transfer of large data volumes.
• Government Support: Local and federal governments have identified Querétaro as a technology hub, offering favourable conditions for permits and regulations.

Arturo Bravo, Ascenty's Mexico country manager, emphasises that these factors make Querétaro an ideal choice for tech companies looking to expand their operations.

Why US Companies are Expanding to Querétaro

Despite Querétaro’s distance from the United States, many American firms are choosing to establish data centres in this region. The reasons include:

• Power Grid Limitations: Constraints on the power grid in the US are prompting tech companies to seek alternative locations with ample energy supply.
• Lower Costs: The cost of land and energy in Querétaro is often more favourable than in many parts of the US.
• Business-Friendly Policies: The Mexican government offers incentives that make it easier for companies to operate in the region.

Water Consumption and Environmental Impact

One of the pressing concerns associated with the proliferation of data centres in Querétaro is their significant water consumption. Cooling systems in data centres, which are essential for maintaining optimal operating temperatures, can use vast amounts of water.

Data centres employ various cooling methods, which can lead to differing levels of water consumption:

• Evaporative Cooling: Some data centres use evaporative cooling, consuming approximately 25.5 million litres of water annually for smaller facilities.
• Closed-Loop Systems: Ascenty utilises a closed-loop cooling system that recycles water through chillers, reducing overall consumption.
• Outdoor Air Cooling: Microsoft’s Querétaro facilities use outdoor air for cooling about 95% of the year, requiring minimal water usage.

Despite these technologies, the overall water usage by data centres is significant. For instance, Microsoft's data centres in Querétaro reported consuming 40 million litres of water for the fiscal year 2025. Such figures are alarming, especially given the region's recent drought, described as the worst in a century, which has severely affected local agriculture and community water supplies.

Community Concerns and Activism

Local residents, including activist Teresa Roldán, voice concerns regarding the prioritisation of water resources for data centres over community needs. Roldán notes, "Private industries are being prioritised in these arid zones," highlighting the disparity between the water quality received by industries versus that available for residents.

Claudia Romero Herrara, founder of the water activist group Bajo Tierra Museo del Agua, emphasises the urgent need for transparent policies regarding water allocation. She asserts, "The priority should be water for basic means," calling for a re-evaluation of water distribution in light of the ongoing crisis.

Air Quality and Pollution Concerns

Another significant issue associated with data centres is air pollution. Many facilities rely on diesel backup generators, which release pollutants into the atmosphere. These emissions can negatively impact local air quality, posing health risks to nearby residents.

Shaolei Ren points out that the dangers of diesel pollutants from data centres have been documented. Despite this, Arturo Bravo asserts that Ascenty operates within guidelines established by local authorities, which he believes adequately protect community health.

The Future of Data Centres in Querétaro

Looking ahead, Ascenty plans to expand its data centre operations in Querétaro, indicating a robust future for the industry in the region. Bravo envisions continual growth, stating, "I do see it just kind of progressing and progressing, with a new data centre there every few years." As AI technologies continue to evolve, the demand for data centres is expected to remain strong.

As the data centre industry grows, it becomes increasingly vital to address the environmental challenges associated with water consumption and air pollution. Balancing economic development with sustainable practices will be crucial for maintaining Querétaro's attractiveness as a technology hub.

What measures can be implemented to ensure that the growth of data centres does not compromise essential resources for local communities? #Querétaro #DataCentres #Sustainability

FAQs

What is a data centre?

A data centre is a facility used to house computer systems and associated components, such as telecommunications and storage systems. They are essential for the storage, management, and dissemination of data.

Why is Querétaro considered a technology hub?

Querétaro is identified as a technology hub due to its strategic location, robust connectivity, supportive government policies, and the presence of major tech companies investing in data centre infrastructure.

How does water consumption by data centres impact the local community?

Water consumption by data centres can strain local water resources, particularly in areas experiencing drought. This can lead to conflicts over water allocation between industries and residents, affecting community access to clean water.

What are the environmental concerns associated with data centres?

Data centres can contribute to air pollution through diesel emissions from backup generators and significant water consumption, raising concerns about sustainability and public health in surrounding communities.

What cooling methods are used in data centres?

Data centres use various cooling methods, including evaporative cooling, closed-loop systems, and outdoor air cooling, each with different impacts on water consumption and energy efficiency.

How is the government of Querétaro addressing water issues related to data centres?

The government of Querétaro has stated that water should prioritise citizen consumption over industrial use, although there are ongoing debates about transparency and resource allocation policies.