Australia data centre firm NextDC reports rising water, energy use with profit beat

Australian data centre firm NextDC reported a rise in water and energy consumption, yet still managed to surpass its profit forecasts. The company's water usage effectiveness ratio climbed to 2.40 litres per kilowatt-hour, up from 2.25 in the previous year. Meanwhile, its power usage effectiveness ratio rose to 1.49 from 1.44, indicating that more electricity is required for cooling and other overheads.

Both metrics have worsened for three consecutive years. NextDC attributes this to newly commissioned capacity needing cooling systems before full IT deployment, as well as data reconciliation work uncovering leaks and meter anomalies. The company's sustainability report, released alongside its financial results, explained that higher water consumption reflected portfolio growth and increased activity across operational, expansion, and commissioning projects.

The ratios are closely monitored by lawmakers and voters as indicators of the strain the data centre boom places on scarce grid and water resources. Governments, regulators, and cities worldwide are increasingly imposing restrictions on new data centre construction due to concerns over electricity costs, water scarcity, land scarcity, and the burden on local communities.

Canberra is considering mandatory, nationally consistent standards for data centres' energy, water, and location choices, including a proposal that data centres must generate power from renewables rather than relying on the grid. NextDC reported a 16% increase in revenue and turned to a profit of A$82.1 million ($59.14 million) for the year ending June, up from a A$60.5 million loss the previous year.

This profit was driven by an accounting change that recognized a gain on the value of its properties, with underlying EBITDA rising 15% to A$248.8 million, beating average analyst forecasts. NextDC's shares rose 3.3% by mid-session on Friday.