Compare Data Center Proposals: Energy & Water Use

This guide walks you through comparing data center proposals specifically for energy and water use, so you can pick the facility that balances performance, cost, and environmental impact. You’ll learn how to standardize the metrics, calculate efficiency ratios, and spot red flags—all before you sign a contract. No special software is needed, just a spreadsheet and the documents the providers send you.

What You’ll Need

• At least two data center proposals (or quotes) that include power and cooling specifications.
• A spreadsheet program (Excel, Google Sheets, or similar) for tracking and comparing numbers.
• The physical address of each facility (to check local climate and water stress).
• A basic understanding of kilowatts (kW), kilowatt-hours (kWh), and gallons or liters.

Step-by-Step

1. Create a comparison table. List each proposal as a column and these rows: total IT load (kW), total facility power (kW), annual energy use (kWh), water usage per day (gallons or liters), cooling type, and any renewable energy or water recycling commitments.
2. Confirm the IT load is the same. If one proposal is for 100 kW of IT equipment and another for 200 kW, you can’t compare them directly. Normalize everything to a per-kW basis. For example, if a facility uses 150,000 gallons of water per year for a 1 MW IT load, that’s 150 gallons per kW per year.
3. Calculate Power Usage Effectiveness (PUE). PUE = Total Facility Power / IT Equipment Power. A lower PUE (closer to 1.0) means more energy goes to computing and less to cooling and overhead. For example, a facility with 1.2 MW total power and 1 MW IT power has a PUE of 1.2. Compare PUEs across proposals, but also check if they include losses from power distribution and backup systems.
4. Calculate Water Usage Effectiveness (WUE). WUE = Annual Water Usage (liters or gallons) / IT Equipment Energy (kWh) per year. The result is liters per kWh (or gallons per kWh). Lower is better. Some facilities report WUE based on water used for cooling only; others include water for humidification or on-site generation. Ask for the breakdown.
5. Check the cooling technology. Air-cooled chillers use more energy but less water; evaporative cooling uses less energy but more water. Look for proposals that use free cooling (outside air) when temperatures allow, or water-side economizers that reduce chiller use. If the facility is in a water-stressed area, a higher WUE might be a bigger concern than a slightly higher PUE.
6. Account for local climate. A facility in a cool, humid climate will naturally have a lower PUE and WUE than one in a hot, arid region. When comparing, adjust for climate by asking each provider for their annual average PUE and WUE, not just design targets. Also check if they use water for cooling year-round or only during peak summer months.
7. Look at the source of energy. Ask if the facility purchases renewable energy credits (RECs) or has a power purchase agreement (PPA) for wind or solar. If two facilities have the same PUE, the one with 100% renewable energy is greener. But beware: some providers claim “greenâ€� status by buying cheap RECs that don’t actually reduce emissions. Ask for the REC vintage and whether they’re retired on your behalf.
8. Check water source and treatment. Is the water potable, reclaimed, or from a nearby river? Reclaimed or gray water is more sustainable. Also ask about water treatment—some facilities use chemicals that are harmful if discharged. Look for proposals that mention closed-loop systems or zero liquid discharge.
9. Calculate total cost of ownership (TCO) including energy and water. Multiply the annual energy use (kWh) by the local electricity rate, and annual water use by the local water rate. Add these to the base rental or colocation fee. This gives you a 5-year TCO that accounts for efficiency differences.
10. Ask for the measurement and verification plan. How will the provider prove their PUE and WUE numbers? Look for third-party audits or at least monthly reporting. If they can’t explain how they measure, assume the numbers are optimistic.
11. Rank your priorities. Score each proposal on energy efficiency (PUE), water efficiency (WUE), sustainability commitments, and cost. Weight these according to your company’s goals (e.g., carbon reduction vs. water conservation). Then choose the winner.

Common Mistakes

• Comparing PUE without checking the IT load. A facility with a PUE of 1.1 but a low IT load may still use more energy per server than one with a PUE of 1.3 and a high IT load.
• Ignoring water in energy calculations. Water is often priced lower than electricity, but in water-stressed regions, the environmental cost can be high. Always include water in your TCO.
• Trusting design PUE instead of actual PUE. Design PUE is often optimistic. Ask for 12 months of actual data.
• Forgetting about on-site generation. If a facility uses diesel generators for backup, that adds to carbon emissions and water use (for cooling the generators). Ask about generator testing frequency.
• Not accounting for future expansion. If you plan to add more IT equipment, check if the facility’s efficiency degrades at higher loads. Some designs are efficient only at a specific utilization rate.

Tips

• Use the Uptime Institute’s Tier Classification as a baseline for redundancy, but don’t assume higher tier means better efficiency—it often means more cooling and power overhead.
• Ask for the facility’s average PUE over the past 12 months, not just the best month. Seasonal variations matter.
• If a proposal lists “free coolingâ€� as a feature, ask how many hours per year it’s actually used in that climate.
• For water, ask if the facility uses water for humidification in winter. That can add significant usage in dry climates.
• Consider the embodied carbon of the facility’s construction—concrete and steel have high footprints. Some providers now publish this data.

Troubleshooting

• Proposals don’t include energy or water data. Ask directly: “What is your annual average PUE and WUE?â€� If they can’t answer, that’s a red flag. You can also ask for a copy of their latest sustainability report.
• Numbers seem too good to be true. A PUE of 1.05 is possible only in very cold climates with advanced cooling. Ask for the measurement methodology and whether they exclude IT equipment fans or power distribution losses.
• Water usage is reported in different units. Convert everything to liters per kWh (or gallons per kWh) using the IT load. For example, 1 gallon = 3.785 liters. If they report per square foot, ask for the IT load in kW.
• You can’t decide between two similar proposals. Create a weighted scorecard. Assign 40% weight to energy, 30% to water, 20% to cost, and 10% to sustainability commitments. Then score each on a scale of 1–5.

Frequently Asked Questions

Q: What is a good PUE?
A: For a modern data center, a PUE below 1.3 is considered efficient. The industry average is around 1.5. But always compare within the same climate zone.

Q: What is a good WUE?
A: There’s no universal standard, but for evaporative cooling, a WUE of 0.2–0.5 L/kWh is common. For chilled water systems, it can be higher. Look for trends and compare against similar facilities.

Q: Can a data center have zero water use?
A: Yes, if it uses only air cooling or closed-loop systems with no evaporation. Some facilities use chilled water but recycle it, resulting in near-zero net water use.

Q: How do I calculate the energy cost of a proposal?
A: Multiply the annual energy use (kWh) by your local electricity rate. For example, if a facility uses 1,000,000 kWh/year and the rate is $0.10/kWh, that’s $100,000/year in electricity.

Q: Should I prioritize PUE or WUE?
A: It depends on your location and goals. If you’re in a drought-prone area, water efficiency might be more critical. Otherwise, energy efficiency (PUE) usually has a larger carbon impact.

Q: What about the carbon intensity of the local grid?
A: Even a very efficient facility will have high carbon emissions if the local grid is coal-heavy. Ask for the facility’s location and check the grid’s carbon intensity. Some providers offer renewable energy options to offset this.

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