DX vs CDW vs CHW: Choosing the Right Cooling Architecture for Your Data Centre

Cooling architecture is one of the most consequential decisions in data centre design. Get it right and you have a system that performs efficiently for 20 years. Get it wrong and you spend that same period managing capacity constraints, excessive energy bills, or maintenance complexity that was never budgeted for.

Direct expansion (DX), condenser water (CDW), and chilled water (CHW) are the three primary cooling architectures used in data centres today. Each operates on a different thermodynamic principle, carries a different capital and operating cost profile, and suits a different scale of deployment. This article compares them across the metrics that matter most to designers and operators.

How Each Architecture Works

Direct Expansion (DX)

In a DX system, refrigerant circulates directly between a compressor, condenser, and evaporator coil inside the CRAC unit. The evaporator coil absorbs heat from the data centre air, the compressor raises refrigerant pressure and temperature, and the condenser rejects that heat to either outdoor air (air-cooled DX) or a condenser water loop (water-cooled DX). No intermediate fluid loop exists between the refrigerant and the data centre air.

Common DX configurations include standalone air-cooled CRAC units, units connected to a shared condenser water loop, and refrigerant-based in-row cooling. Brands like Vertiv Liebert PDX, Stulz CyberAir, and Schneider Uniflair TDCV all operate on DX principles.

Condenser Water (CDW)

CDW systems use a water-cooled condenser loop to reject heat from DX CRAC units to a central cooling tower or dry cooler. The refrigerant circuit remains inside each CRAC unit, but instead of rejecting heat to outdoor air directly, each unit rejects to a shared condenser water loop running at typically 28 to 35°C. This shared loop then rejects heat via evaporative cooling towers or adiabatic coolers on the roof.

CDW sits between DX and full chilled water in terms of complexity. It retains the simplicity of self-contained refrigerant circuits while gaining the efficiency benefit of evaporative heat rejection.

Chilled Water (CHW)

Chilled water systems centralise the refrigeration plant in one or more water-cooled chillers. Those chillers produce chilled water at typically 7 to 12°C, which is distributed via pipework to CRAH (computer room air handler) units throughout the data centre. The CRAH units contain no refrigerant; they are simply fan coil units that cool air across a chilled water coil. Heat rejection from the chillers goes to cooling towers via a condenser water loop.

CHW is the dominant architecture in large data centres above approximately 1 MW of IT load.

Efficiency Comparison

Efficiency in cooling systems is expressed as the coefficient of performance (COP), the ratio of cooling output to electrical input. A COP of 3.0 means 3 kW of cooling delivered per 1 kW of electricity consumed.

Air-cooled DX typically achieves a COP of 2.5 to 3.5 at design conditions. In Australian summer conditions, particularly in Brisbane and western Sydney where ambient temperatures regularly exceed 35°C, performance degrades. Air-cooled condensers lose efficiency as ambient temperature rises, and a unit rated at COP 3.2 at 25°C ambient may drop to COP 2.4 at 40°C.

CDW systems improve on this by rejecting heat to a condenser water loop maintained at lower temperatures through evaporative cooling. Typical system COP for CDW configurations ranges from 3.5 to 4.5, with the cooling tower providing meaningful efficiency gains during periods of high wet-bulb temperature. Melbourne's lower summer wet-bulb temperatures make CDW particularly effective in that climate.

Chilled water systems achieve the highest efficiency at scale. A modern water-cooled chiller plant with variable speed drives and optimised condenser water setpoints can reach system COP values of 5.0 to 6.5. At data centre scale, this translates directly to PUE improvement. A site running air-cooled DX at a cooling PUE contribution of 1.45 might achieve 1.25 with a well-designed CHW plant.

ASHRAE TC 9.9 guidelines note that chilled water plants with free cooling capability can push effective COP above 10.0 during cooler months when the cooling tower can produce water cold enough to bypass the chiller entirely.

Capital Cost

Capital cost follows the inverse of efficiency. DX is cheapest to install, CHW is most expensive.

For a 250 kW IT load data centre, indicative installed costs in Australia (2025 pricing) look roughly like this:

• Air-cooled DX: $180,000 to $280,000 for CRAC units and electrical connections. No external plant beyond condenser fans.
• CDW: $280,000 to $420,000, adding cooling tower, condenser water pipework, pumps, and water treatment infrastructure.
• CHW: $500,000 to $900,000, covering chillers, cooling towers, primary and secondary pumping, pipework distribution, and CRAH units.

At 250 kW, CHW capital cost is hard to justify. At 2 MW, the efficiency savings over a 10-year operating period typically recover the additional capital within four to six years.

Operating Cost

Electricity is the dominant operating cost for data centre cooling in Australia. With commercial electricity rates in Sydney and Melbourne running at $0.14 to $0.22 per kWh (2025 contract rates for medium commercial loads), the efficiency gap between architectures becomes financially material at scale.

Consider a 500 kW IT load facility operating at full capacity, 8,760 hours per year:

• Air-cooled DX at COP 2.8: cooling system draws approximately 179 kW, costing around $220,000 per year at $0.14/kWh.
• CDW at COP 4.0: approximately 125 kW draw, costing around $153,000 per year.
• CHW at COP 5.5: approximately 91 kW draw, costing around $112,000 per year.

The CHW system saves roughly $108,000 per year in electricity versus air-cooled DX at this scale. Over ten years, that is over $1 million, more than covering the additional capital cost.

CDW adds water treatment and cooling tower maintenance costs that DX avoids. CHW adds chiller maintenance, water treatment across two loops, and the complexity of managing a central plant. These costs are real but modest relative to electricity savings at scale.

Scalability

DX scales poorly beyond approximately 500 kW of cooling capacity. Each additional CRAC unit adds a standalone refrigerant circuit, condenser connection, and controls integration. Refrigerant pipe runs are constrained by pressure drop and oil return requirements. Managing multiple independent refrigerant circuits across a growing data centre floor creates maintenance complexity and spare parts inventory challenges.

CDW scales better. Adding CRAC units to an existing condenser water loop is straightforward provided the loop has spare capacity and the cooling tower is sized for growth. The shared rejection infrastructure means incremental expansion costs less per kilowatt than the initial installation.

CHW scales best of all. A chiller plant can be designed with N+1 or 2N redundancy at the central plant, and CRAH units on the floor are simple fan coil units with no refrigerant. Adding capacity means adding CRAH units and ensuring chiller plant capacity is sufficient. Many large data centres run modular chiller plants where additional chillers can be added in frames as IT load grows.

Climate Suitability in Australia

Australia's climate diversity matters here. Brisbane and the Gold Coast experience high summer wet-bulb temperatures (regularly 24 to 27°C in January and February), which limits the efficiency gain from evaporative cooling and makes free cooling via cooling towers impractical for most of summer. Sydney is slightly better. Melbourne's lower summer wet-bulb temperatures (typically 18 to 22°C on most days) make CDW and CHW with free cooling economically attractive.

For Brisbane facilities under 500 kW, air-cooled DX remains the most practical choice despite its efficiency limitations. The capital cost advantage is real, free cooling is rarely available anyway, and the operational simplicity suits smaller teams.

For Melbourne facilities above 300 kW, CDW or CHW should be evaluated seriously. Free cooling hours in Melbourne can exceed 3,000 per year at appropriate chilled water setpoints, delivering substantial electricity savings.

Sydney sits in between. CDW is often the right middle ground for Sydney facilities in the 300 kW to 1.5 MW range.

When to Choose Each Architecture

Choose DX when:

• IT load is below 300 to 500 kW
• The facility is a single-tenant or enterprise data centre without a dedicated facilities team
• Capital budget is constrained and operating costs are secondary
• The site lacks space or water access for cooling towers
• The deployment timeline is short (DX can be installed and commissioned faster than CHW)

Choose CDW when:

• IT load falls between 300 kW and 2 MW
• The building already has a condenser water loop or cooling tower infrastructure
• Efficiency improvement over air-cooled DX is required but full CHW plant is not yet justified
• The climate supports meaningful evaporative cooling gains (Sydney, Melbourne, Adelaide)

Choose CHW when:

• IT load exceeds 1 MW and is expected to grow
• The facility is a colocation or hyperscale data centre with a dedicated engineering team
• Long-term PUE targets require cooling system COP above 4.5
• Free cooling is viable in the local climate
• Centralised redundancy and N+1 chiller configurations are required for uptime commitments

Hybrid Approaches

Many real-world data centres combine architectures. A common pattern is a CHW plant serving high-density rows via in-row CRAH units, with supplementary DX perimeter units handling lower-density areas or providing backup capacity. Another common approach is a CDW loop serving CRAC units in the near term, with the infrastructure pre-designed to connect to a chiller plant when IT load growth justifies the investment.

The key is designing for the intended end state from day one. Retrofitting CHW distribution pipework into a data centre built around standalone DX units is expensive and disruptive. If CHW is the five-year destination, the structural and spatial allowances should be in the original design.

Making the Decision

The right architecture depends on load size, growth trajectory, climate, capital availability, and operational capability. There is no universal answer, but the decision framework is consistent: DX for simplicity and speed at small scale, CDW as the efficiency step-up for mid-range facilities, and CHW for large-scale operations where long-term energy cost justifies the upfront investment.

For data centres in Brisbane, Sydney, or Melbourne where this decision is being worked through now, the team at CRAC Services Australia works across all three architectures and can provide thermal modelling and architecture specification as part of the design process. More information is available at [crac.services](https://crac.services).