Inefficient water production, distribution, and consumption are draining the world's decreasing freshwater resources.

Inefficient technologies and outdated processes mean many industries are consuming water at unsustainable rates. Data centers already use approximately 560 billion liters of water annually, a figure the International Energy Agency projects could double to 1,200 billion liters by 2030. That's six times the EU's total freshwater abstraction in 2022. The semiconductor industry faces similar risks. By 2030-2040, 40% of global semiconductor manufacturing sites are expected to be in regions of high or extreme water stress.

This combination of high industrial water demand and regions of water scarcity threatens industrial resilience. The problem is especially pertinent within the context of how vulnerable the world's freshwater supply is due to global warming and the expected increase in demand: Since 1900, global freshwater use has increased sixfold, and by 2030, the demand could outstrip the supply by 40% globally. Even today, 3.6 billion people lack adequate access to water at least one month per year.

Solutions to address water and energy waste are readily available

In a new paper released today, Danfoss showcases that many of the technological solutions needed to reduce water and energy waste across all phases of the water cycle already exist. Attention is now needed on investing in these solutions, and it requires bold policy action to turn ambition into reality.

• Desalination: If all existing desalination plants worldwide were retrofitted to operate at the current technological potential (2.0 kWh/m³), it could bring financial savings of €34.5 billion and reduce CO2 emissions by 111 million metric tons.
• Wastewater treatment plants can significantly reduce both energy use and operational costs by installing variable speed drives (VSDs), which enable motors and pumps to adjust to real-time demand rather than running at fixed speeds. A plant in Chennai, India, saved roughly 22% of its energy use simply by implementing VSDs. Scaling this potential is essential to meet rising demand.
• Liquid cooling of data centers, which operates on a closed water loop, consumes far less water compared to traditional evaporative cooling systems. Direct-to-chip liquid cooling systems are also at least 15% more energy efficient than their air-cooling counterparts.

The financial impact of neglecting the water-energy nexus.

Neglecting the connections between the water and energy systems, referred to as the 'water-energy nexus', carries significant financial and competitiveness risks. The growing crisis of water scarcity could cause high-income countries to see an 8% reduction in their GDPs by 2050 unless inefficiencies across the water and energy nexus are addressed.

Meanwhile, countries are losing significant amounts of treated water in leaky distribution networks. In the US, leaking pipes lost the equivalent of USD 7.6 billion worth of treated water in 2019 - a rate that is expected to increase to USD 16.7 billion by 2039. Investments in existing solutions such as sensors, pumps, and variable speed drives can reduce water loss and increase the energy efficiency of water distribution networks.

"We need ambitious regulation, water efficiency targets, and incentive systems that stimulate investment in proven technologies like leak detection, smart metering, pressure management, and energy efficiency optimization," says Kim Fausing. "Governments should consider integrating water efficiency into energy audits and set national industrial water reuse targets. Every drop saved means less energy wasted. Technological solutions that can strengthen both water and energy efficiency across all phases of the water cycle already exist."