AI Boom to Drive EUR6.8 billion in Water Spend for European Data Centers by 2036 According to Bluefield Research

Water-related spend across Europe’s data center sector is projected to reach EUR6.8 billion by 2036. This increase is driven by the growth of AI, which is placing additional pressure on power grids, water resources, and permitting systems, according to a new report from Bluefield Research, titled Europe Water for Data Centers: Market Trends, Opportunities, and Forecasts, 2026–2036.

Europe is expected to see significant growth in data center development over the next decade. However, achieving this growth will depend not only on access to power but also on water, cooling infrastructure and regulatory approvals. Approximately 62% of the projected spending is expected to be directed toward capital investments, including cooling systems, water treatment and reuse infrastructure, municipal connections and pretreatment facilities.

The rapid scaling of AI and hyperscale computing is reshaping how digital infrastructure and water systems interact across Europe. Water is becoming a critical design, operational and permitting consideration that increasingly influences where and how data centers are built.

Zineb Moumen, an analyst at Bluefield Research

The growth of the sector is unfolding amid tightening regulatory and physical constraints. New European Union reporting requirements for power and water use are converging with stricter local permitting regimes, rising regional water stress and strained energy systems. As a result, water availability is emerging as a key factor alongside power access in determining project feasibility, site selection and development timelines.

Market Outlook and Investment Scenarios
Under Bluefield’s baseline scenario, cumulative water-related spending is forecast to reach EUR6.8 billion by 2036. In a higher-growth scenario, driven by accelerated AI adoption and more favorable permitting conditions, this spending could climb to EUR7.1 billion. Even in a slower-growth outlook, the market is projected to reach EUR4.7 billion.

“As capital intensity and resource pressures rise across Europe’s data center market, the investment case for water infrastructure is becoming impossible to ignore,” said Moumen. “The most durable opportunities will arise from infrastructure solutions that not only facilitate project development but also help secure permits, operate efficiently and scale over time.”

Regional Growth Patterns Reflect Infrastructure Constraints
Germany, the U.K. and France are expected to account for 40.5% of cumulative water-related spend for data centers through 2036. However, future growth in these markets will increasingly be shaped by factors such as grid access, permitting requirements, energy efficiency targets and obligations for heat reuse.

The next wave of expansion is emerging in Spain, Italy, Poland and the Nordic countries, each representing a distinct market archetype with its own mix of constraints and opportunities:

• Spain: Water-resilient development in water-stressed regions
• Italy: Land-use planning and regional permitting constraints
• Poland: Grid modernisation and heat-recovery integration
• Nordics: Low-carbon power availability and sustainable cooling strategies

Indirect Water Use from Electricity
Water use in cooling systems typically receives the most attention, but a growing share of data centers’ water footprint originates indirectly through electricity generation.

Bluefield Research estimates that the indirect water use associated with electricity consumption in European data centers will increase by 30% through 2036. This exposure varies significantly by country. For example, markets that rely more heavily on thermal power generation, like Germany, exhibit a higher indirect water intensity compared to those with lower-carbon electricity mixes, such as Austria, Sweden and Denmark.

Europe’s exposure is particularly complex due to the highly interconnected nature of electricity systems. Data centers may rely on power generated from a diverse mix of sources, including nuclear, hydroelectric, natural gas, renewable energy and imported electricity. Recent heatwaves have highlighted the vulnerability of these systems, as elevated river temperatures have constrained nuclear generation output in several markets.

“The indirect water footprint tied to electricity is the exposure most operators are not yet pricing into their planning,” Moumen explained. “As AI workloads scale and server densities increase, operators will need to understand not only how many megawatts they can secure, but what water exposure is embedded within those megawatts.”

Liquid Cooling Becomes a Platform Strategy
As AI workloads increase computing densities and thermal loads, liquid cooling is shifting from a niche technology to a core component of next-generation data center design. Bluefield Research projects that liquid cooling technologies will account for approximately 20% of Europe’s data center cooling market by 2036.

This transition is redefining competitive dynamics across the cooling, water treatment and infrastructure markets. As operators strive to improve performance while navigating power and water constraints, infrastructure providers such as Ecolab and Vertiv are expanding their capabilities through acquisitions. They are building integrated platforms spanning cooling, water treatment and system optimisation.

At the same time, water treatment providers are becoming attractive acquisition targets as data center operators seek partners capable of supporting performance, water quality management and regulatory compliance.

“Europe’s data center market is entering a phase where cooling can no longer be provided as a standalone system,” said Moumen. “As AI deployments scale, operators must manage the entire thermal ecosystem—from liquid cooling and water quality to utility integration and operational performance. The companies best positioned for growth will be those that can deliver these capabilities as an integrated solution.”

The Insight Report, Europe Water for Data Centers: Market Trends, Opportunities, and Forecasts, 2026–2036, provides an 11-year forecast across 31 European countries. The full report is available for purchase and can be downloaded immediately from Bluefield’s website.

About Bluefield Research
Bluefield Research is one of the leading providers of global water market data and insights, covering the municipal and industrial sectors across infrastructure, policy and technology. Bluefield helps strategic decision-makers understand where the water market is going—and why.