Governments Are Tightening Rules for Data Centers’ Power, Water and Land Use

Data centers are increasingly being regulated as major infrastructure projects rather than routine industrial buildings. The policy response is varied, but the direction is clear: authorities are asking developers to demonstrate access to power and water, accept more public scrutiny, and build only in locations that meet tighter land-use and community-protection standards.

The result is not a universal shutdown of data-center development. It is a shift from automatic or lightly regulated approval toward resource-aware siting and enforceable operating conditions.

Thailand: pause growth while national rules are written

Thailand has taken one of the most visible pause-and-redesign approaches. Construction on about 49 data-center projects and approval decisions for more than 117 pending projects were put on hold while agencies prepare new criteria. The planned standards are intended to address resource use, locations, safety, and economic, social and environmental impacts. 25

Bangkok separately suspended three planned standalone projects for renewed review under tighter standards covering safety, fuel storage, land use, and electricity and water consumption. Officials also pointed to a previous classification loophole that had allowed data centers to be treated as warehouses. 18

The significance is broader than the number of projects: Thailand is trying to establish a national framework before its rapid buildout locks in demands on local grids, water supplies and communities.

Tucson: make large projects pass a public, resource-focused review

Tucson adopted its first data-center-specific land-use regulations on August 5, 2026. The city’s process requires neighborhood coordination, a public hearing, Zoning Examiner review and final consideration by the Mayor and Council. 33

The rules also make resource evidence part of the development case. City materials specify that applicants must demonstrate adequate energy and water supply and disclose proposed energy use and energy mix. They also address potable-water use for cooling, setbacks from sensitive uses and independent noise studies. 35

That approach turns a proposed large facility into a public land-use decision, rather than a project that can proceed solely through ordinary industrial zoning.

Saudi Arabia: standardize commercial data-center development

Saudi Arabia has adopted municipal regulations for standalone commercial data centers. The rules apply both inside and outside urban boundaries and require sites to have access to essential infrastructure, including electricity, telecommunications and transportation. 38

Unlike Thailand’s temporary halt, this is principally a growth-management measure: a framework to standardize site and development requirements as commercial data-center capacity expands. 38

Louisville: a 180-day pause while permanent rules advance

Louisville Metro approved a six-month, or 180-day, moratorium on new data-center development applications, rezoning requests and conditional-use permits. The pause also covers proposals to repurpose existing buildings, and it can end early if permanent land-code amendments are approved. 23

The Planning Commission has since recommended amendments that would create separate categories for data centers and, under the reported draft, cap facilities at 500,000 square feet and limit them to the M-1 industrial district. The proposed rules still require further legislative action. 6

Recent changes to the proposal include tighter provisions involving noise, water systems and separation from sensitive areas such as homes. 7

West Hempfield Township: steer facilities away from rural and residential land

West Hempfield Township, Pennsylvania, unanimously approved an ordinance regulating the size and location of data centers. The ordinance limits facility size and restricts proximity to residential and agricultural properties. 55

Planning materials describe a complementary siting principle: requiring public water and sewer connections so data centers are located in the township’s designated Growth Area rather than agricultural and rural areas. 54

This is a land-preservation model of data-center policy—allowing the use only where existing infrastructure and the local growth plan can support it.

Oldham County: stronger scrutiny, but final rules remain unclear

Oldham County held a public hearing and second reading on Planning Commission-recommended data-center regulations in August 2026. At that stage, the Fiscal Court could approve the ordinance, approve amendments, or table the final reading; the available reporting does not establish the final adopted text or legal outcome. 4

That distinction matters. A proposal, hearing or planning recommendation is not the same as an enacted rule. Still, Oldham County illustrates how community review and local legislative process have become central to decisions on large facilities.

Water rules are becoming a practical permitting test

Water policy is emerging as a particularly concrete regulatory lever. One proposed Franklin County, Pennsylvania ordinance requires any data-center water-cooling system to use closed-loop cooling, which recirculates water without direct exposure to the atmosphere. 50

Other proposed approaches focus on the source of cooling water and proof of supply. For example, proposed West Virginia legislation would prohibit data centers from withdrawing or using groundwater or aquifer water for cooling, while allowing options such as closed-loop, air-cooled and dry-cooling systems that do not use groundwater. 49

These measures do not establish a single universal standard, and proposed rules should not be confused with enacted law. But they show the emerging direction: cooling design and water source are becoming approval conditions, not merely engineering choices.

The new approval standard: demonstrate that the project fits

Across these examples, the common policy framework has four parts:

• Pause development when rules are missing or inadequate. Thailand and Louisville show how a temporary hold can give governments time to set standards. 252
• Require meaningful public review. Tucson’s neighborhood coordination, hearings and final council consideration make community impacts part of the formal process. 33
• Control location and scale. Louisville’s proposed size cap and West Hempfield’s location and buffer restrictions aim to keep large facilities compatible with surrounding land uses. 655
• Demand resource accountability. Adequate energy and water supply, energy-use disclosure, cooling requirements and limits on water sources are increasingly part of the permitting calculus. 355049

For developers, the practical implication is that power availability, water strategy, noise, setbacks and community engagement now need to be addressed early—before land acquisition and construction planning are far advanced. For communities, these rules create clearer points at which to evaluate whether a project’s benefits and infrastructure demands are compatible with local priorities.