Data Centre Cooling: Why Heat, Water and Power Are Now the Main Constraint

Two very different data centre stories landed within days of each other. They point at the same bottleneck. On Monday 28 September, Goodman Group confirmed it had told the NSW Department of Planning it would no longer proceed with its A$1.2 billion Project Mars data centre in Lane Cove, on Sydney's north shore, according to ABC News. Goodman cited "changes in regulatory environment" and community feedback.

Two days earlier, Tom's Hardware reported that Google is preparing to launch an experimental satellite named MVP, carrying four Tensor Processing Units and about 1,000W of solar power, to test whether AI workloads can run in orbit. The chips will only manage around 15 minutes of operation before they have to be shut down to cool off.

Cooling is not a side issue in either case. It is the physical limit that decides where a data centre can be built, how much power it can draw, and increasingly whether the public will accept it at all.

Heat is the constraint, not compute

In a conventional data centre, air cooling works fine at moderate rack densities. Push AI accelerators into a rack and the heat load per square metre climbs fast, which is why liquid cooling has moved from a niche option to a default for new AI builds. The Google orbital test is the extreme version of the problem, because there is no air to move heat into. Tom's Hardware reported that Google devised a cooling system that vents heat directly into space, since fan-based cooling will not work in vacuum. Radiation is a second problem: it can cause bit flips in chips, and Google's interim answer is to restart the chips periodically.

The satellite will handle AI requests for up to a year, although it is expected to remain in orbit for up to six years before burning up on re-entry. James Manyika, Google's senior vice president of research, told the New York Times, as quoted by Tom's Hardware, that "we don't expect, to be perfectly frank, that we'll have anything usefully operational in the next few years." He compared the effort to Google's driverless car programme, which was tested "like 15 years before anything showed up."

Google's long-term plan, per Tom's Hardware, is a pair of satellites next and eventually networked fleets of more than 80 satellites. Manyika's own estimate is 15 years to go from a four-chip server to a full data centre.

Power contracts come apart

On the ground, the cooling problem is inseparable from the power problem. TechCrunch reported on 25 September that Crusoe, a Denver-based AI data centre startup that recently raised $3.9 billion, has abandoned a $1.25 billion plan to buy 29 stationary natural gas turbines from Boom Supersonic. The first deliveries had been due to start in 2027.

Boom CEO Blake Scholl said in a post on X that the companies were no longer moving forward with the turbine launch partnership. Scholl wrote that Boom will deliver about 250MW of Superpower turbines next year to other sites and is targeting 1GW in 2028. A line he later removed from the post said turbines were "no longer part of Crusoe's near term primary power mix at Abilene/etc." Crusoe spokesperson Andrew Schmitt told TechCrunch that the company's energy plans "haven't changed" and that it still plans to use turbines, "just not Boom's."

Crusoe's initial 1.2 gigawatt data centre in Abilene, built for Oracle and OpenAI, is powered by the grid, according to TechCrunch, with a gas-turbine plant used for backup only. The company is also building a 900 megawatt data centre in Abilene for Microsoft, which will be powered by on-site gas turbines. That distinction matters for cooling: on-site generation and liquid cooling are usually designed together, because both are sized around the same power envelope.

What the public is actually objecting to

Community opposition is often described as a single phenomenon. The dossier suggests it is several. In Pennsylvania, Tom's Hardware reported on 28 September, NorthPoint Development wants to build a data centre on 1,300 acres near Hazle Township in the Pocono foothills. The company has offered $10,000 cheques to 4,500 households if the facility is approved, alongside up to $120 million over 15 years for community and local services. The Wall Street Journal, cited by Tom's Hardware, found few residents eager to welcome the project for the payout. Concerns cited included property values, noise pollution and distrust of both the developers and local government. Hazle Township's government already rejected the project on zoning grounds last year and has enacted a temporary moratorium on data centre construction.

In Australia, the objections were about proximity. Project Mars in Lane Cove sat roughly 20 metres from the nearest house and 160 metres from Lane Cove West Public School, ABC News reported. Sweltering Cities senior campaigner Sanaa Shah told the ABC the withdrawal was "a clear testament to the large scale community resistance that's forming to data centres." Liberal senator Sarah Henderson had pressed Goodman's general manager of developments, Ben McGilp, to withdraw the proposal during the first hearing of the federal senate inquiry into data centres and artificial intelligence.

Industry framing is different. Belinda Dennett, CEO of advocacy group Data Centre Australia, told the ABC that Australia risked losing data centre developments to neighbouring countries, citing approval processes, supply chain issues and "social licence issues."

Water, land and the climate question

Wired reported on 27 September that climate change is rarely the first concern raised by data centre opponents. At a Climate Week panel in New York, protesters from Extinction Rebellion NYC interrupted a session featuring tech executives, and Wired's Molly Taft noted that polling shows climate ranks behind water, energy use and its effect on bills, and local air and noise pollution. Cully Cavness, cofounder and president of Crusoe, said he assumed most protesters did not live near a data centre. Varun Sivaram of Emerald AI argued data centres could become "good citizens" that help lower bills and bring more clean energy online.

The Guardian's reporting from Andhra Pradesh on 26 September shows how those arguments land when a project is large enough. Google is building a hyperscale AI data centre in the Indian state, announced publicly as a 1GW project with a $15bn price tag. State environmental clearances, however, permit more than double that: 2.51GW, according to the Guardian. That is the power equivalent of two large nuclear reactors at full output, and over a year amounts to upwards of 30% of the current energy consumption of Andhra Pradesh, a state of more than 55 million people. The Guardian also reported that 75% of India's electricity grid runs on coal, and that clearances were issued in nine days with no public consultation. Three petitions challenging the approval have been filed with India's National Green Tribunal, and a public litigation has been filed in the Andhra Pradesh high court.

Cooling and water are the link between these stories. A 2.51GW campus needs cooling at a scale that competes with agriculture and drinking water in a region the Guardian describes as already struggling with extreme heat, water, land and power shortages. A 15-minute orbital test needs a cooling system that dumps heat into vacuum. Neither is a software problem.

Where the pressure goes next

The immediate signal from this week is that the constraint has moved from chips to sites. Goodman's withdrawal removes a A$1.2 billion project from the pipeline rather than delaying it, and the company pointed to regulation rather than cost. Crusoe's turbine decision removes a specific power source, not the demand for power. Google's satellite removes the land question entirely, at the cost of almost no usable compute.

ABC News reported that NSW has introduced a fast-track programme for data centres meeting certain requirements, and that the Prime Minister now says new federal rules for data centres will be introduced into Parliament by the start of this year. CT Group told its clients last month that local opposition had become a risk to development, per the ABC. Until those rules exist, the practical question for any operator is simpler: can you cool it, can you power it, and will the neighbours let you build it.