Closed-Loop and Waterless Data Center Cooling: What It Means for a Site

Every data center moves heat from chips to outdoor air. The question is whether the last step evaporates water. In an open evaporative system, a cooling tower or evaporative cooler sprays water into moving air, and the evaporated water carries the heat away. In a closed-loop system, the water or glycol that picks up the heat never touches outdoor air; it circulates through sealed pipes to a dry heat exchanger, and fans push ambient air across its coils.

“Waterless” is a marketing shorthand, not a technical category. Microsoft’s own announcement is careful: its new designs recycle water through a closed loop that circulates between the servers and chillers, and it calls them “zero-water evaporated” designs.¹ The loop still needs an initial fill, occasional makeup for leaks and maintenance, and the building still needs potable water for restrooms, kitchens and fire protection. A closed-loop site uses far less water than an evaporative cooling site, but it is not disconnected from the water system.

Our guide to data center water requirements compares water volumes across cooling designs. This guide focuses on the equipment that makes low-water designs possible and what that equipment asks of the land, the power supply and the neighbors.

Three families of equipment do most of the work in low-water designs, often in combination.

A dry cooler can never cool the loop below the outdoor dry-bulb temperature, and in practice it runs a few degrees above it. That is why dry coolers pair naturally with liquid cooling, which can accept much warmer water than air-cooled data halls.

Adiabatic units add evaporation only when needed. One manufacturer describes its pre-cooling pads as inactive until the system passes a preset temperature, then wetted and modulated by controls as load or ambient temperature peaks; it claims up to 70% less water than comparable cooling towers, a vendor figure that should be checked against local weather data.⁵ Another explains that air passing through a wetted pad drops to within a few degrees of the ambient wet-bulb temperature.⁶

Air-cooled chillers use refrigeration compressors, so they can deliver cold water on any day, at the cost of the most electricity. DOE’s Federal Energy Management Program notes that raising temperature setpoints and widening humidity ranges saves both energy and water, which is the basic lever every low-water design pulls.¹⁰

Removing evaporation shifts work from water to electricity. Microsoft states it plainly: replacing evaporative systems with mechanical cooling will increase its PUE, with a nominal increase in annual energy compared with its evaporative designs.¹ Google frames the same choice as part of its watershed screening: air cooling uses little water but more energy, and the company has said it expects to use water cooling for most sites where the local watershed can support it.¹¹² In June 2026 a Google executive told Axios that air cooling uses on average about 10% more energy than evaporative cooling, and roughly twice that on a hot day.¹²

The size of the penalty depends heavily on the design and climate. One published case study of a 1,500 kW load in Denver found the water-cooled chiller plant used about 1.6 million kWh a year and the air-cooled plant about 4.7 million kWh, while also noting that water consumed at power plants can exceed on-site water use.⁹

Annual energy is only half the story. The harder number for a site is the peak. Latitude Media, describing Google’s cooling strategy, reported that on roughly ten days a year many top locations need up to 50% more energy to air-cool than on an average day.² Those are the same hot afternoons when the regional grid peaks. A March 2026 preprint makes the mirror-image point for water: evaporative cooling’s peak withdrawals fall on the hottest days, and many communities lack spare capacity to supply them.³

The warmer the water a server can accept, the more hours a dry cooler can do the job alone. ASHRAE TC 9.9 classifies liquid-cooled equipment by the facility water temperature it accepts. The fifth edition of its thermal guidelines (2021) renamed the classes by their upper limit: W17, W27, W32, a new W40, W45 and W+.⁷ ASHRAE’s earlier framework tied the warmest class (then W4, up to 45°C) to a water-side economizer using a dry cooler or cooling tower with no supplemental chiller, while cooler classes assumed chillers.⁸

Chipmakers are now designing to that end of the range. NVIDIA’s cooling lead has described its 45°C reference approach as a closed loop with dry coolers and no evaporative water, outside of perhaps 1% of the year when chillers might be needed in some climates.⁴ That qualifier matters: “chiller-less” depends on the site’s design dry-bulb temperature, the approach temperatures of the dry cooler and coolant distribution units, and what share of the load is still air-cooled.

For a deeper look at how density changes acres per megawatt and building form, see air vs. liquid cooling site implications; for how climate sets free-cooling hours, see climate and cooling in site selection.

Choosing closed-loop cooling does not remove site constraints; it moves them.

• **More electrical headroom.** Size the utility request for the cooling plant’s hot-day demand, not the annual average.¹²
• **More outdoor equipment area.** Dry coolers reject heat to air alone, so a campus needs more coil area and fan capacity than a tower plant; one manufacturer markets double-stacked adiabatic units specifically to shrink that footprint.⁶ See cooling plant and equipment yard space.
• **Noise planning.** Hundreds of large fans run hardest on hot nights, which is when neighbors have windows open. Treat sound modeling as part of layout, and review noise setbacks and buffers.
• **A smaller but real water service.** Fill, makeup, adiabatic peaks (if used), domestic use and fire protection still need a reliable connection.
• **Airflow and spacing.** Dry coolers placed too close together, or downwind of generators, recirculate hot air and lose capacity.

The upside is that a closed-loop design can open sites that evaporative cooling would rule out: places with limited municipal capacity, no reclaimed water, discharge limits, or political resistance to large water withdrawals. Google’s framework explicitly switches to air cooling or reclaimed water when a watershed is rated high risk.¹¹ Our guides on water stress and drought risk and reclaimed water cover those alternatives.

Low-water claims are usually expressed through WUE, liters of site water per kWh of IT energy. Microsoft reports a fleet average of 0.30 L/kWh in its last fiscal year, a 39% improvement over 0.49 L/kWh in 2021, and that fleet still mixes air- and water-cooled systems.¹ Its first zero-evaporation pilots, in Phoenix and Mt. Pleasant, Wisconsin, are slated for 2026, with new sites on the design coming online from late 2027.¹

Keep three cautions in mind. First, site WUE ignores water used to generate the extra electricity, which the Denver study and others note can be larger than on-site use.⁹ Second, annual averages hide peaks, which is what water and power utilities must build for.³ Third, vendor water savings are modeled against a particular climate and baseline. The Lawrence Berkeley National Laboratory’s data center best practices list metering water use and raising chilled water temperature among the first steps, so ask for metered data where an operator has it.¹³ The WUE guide covers the metric in detail.

Low-water cooling is a design decision, but it should be tested against the site early because it changes the power request and the layout.

1. 01Pull the site’s extreme design temperatures and count the hours above the dry cooler’s approach limit.
2. 02Ask the end user what share of load will be liquid-cooled and at what facility water temperature.
3. 03Estimate the cooling plant’s hot-day electrical demand and include it in the utility load request.
4. 04Lay out the dry cooler or chiller yard with spacing, airflow and a noise model to the nearest homes.
5. 05Confirm the remaining water service: fill, makeup, any adiabatic peaks, domestic and fire flow.
6. 06Consider pairing evaporative assist or thermal storage with grid limits; the 2026 preprint suggests coordinating cooling mode with whichever system is stressed.³

BlackForge screens sites for power, water and layout together, which is where these trade-offs show up. If you are weighing a parcel for a low-water design, you can get a site reviewed.