Hot, or not? Why are there so few datacentre waste heat projects in the UK?
There are some on the way, in London and Yorkshire, but the UK lags behind other European countries. We look at the challenges of providing district heating from datacentre waste heat
Datacentres in Nordic countries are connected to multiple district heating networks. The UK’s neighbouring countries, Ireland and France, also have projects. But the UK hasn’t kept pace. Will that change?
Challenges for the UK include matching locations with energy demand, as well as ensuring that other foundations are in place, such as the regulatory framework to support it. One of the biggest problems of all is the lack of local heating networks in the UK that datacentres could supply.
“The UK just doesn’t have many district heat networks. A lot of infrastructure is required that is done best as public infrastructure,” says Peter Judge, senior research analyst at Uptime Intelligence.
Proximity to the user and local demand are crucial. Whether business, industry or residential, customers need to be near the datacentre that generates the waste heat. You need to work with multiple stakeholders and create solutions that depend on multiple technologies, says Judge.
Everything – and everyone – needs to work together within designs that are customised for specific local conditions. In short, hooking up datacentres to energy networks to use waste heat is complicated.
Technical hurdles and why the Nordics are ahead
At the datacentre end of things, migration to liquid cooling should help tip the scale, according to Judge. Installed liquid cooling systems are often air-cooled, with a lot of heat still externally expelled.
“Most datacentres are air-cooled, representing low density of heat,” Judge explains. “But it turns out that liquid cooling doesn’t really change the situation that much.”
Retrofitting is possible. But which metrics to use and how to measure them can be in doubt. Commercial and regulatory hurdles, including licensing, contractual and VAT considerations, tag along for the ride.
In northern climates, reusing waste heat from industry, including datacentres, to warm local residential or commercial areas is more commonplace. But many Nordic regions developed local heating networks years ago, so the foundations are more likely to be in place. And in cold weather, it makes sense to share heating across a neighbourhood.
A datacentre that wants its heat reused typically can’t afford to put in a heat network. It needs to be where one exists or is being built
Peter Judge, Uptime Intelligence
“They’re plugging in additional sources of heat like datacentres without as much expense and effort,” says Judge. “If you’re a datacentre that wants your heat reused, you typically can’t afford to put in a heat network. You need to be where one exists or is being built.”
In one Stockholm utility company’s existing district heat networks, they burn wood chips from Swedish forests so they can adjust heat production as needed. Still, datacentres don’t offer that level of flexibility. In fact, at least one meta-review has proposed having not one but two or more datacentres nearby to “spread the load”.
Judge also notes that district heat network projects are expensive. Meanwhile, costs are high and rising, which reinforces negative perceptions of datacentres, alongside concerns about the sufficiency of grid connections for other purposes, such as housing developments.
“Despite the heat being effectively free [locally], people feel it works out as expensive. They feel that problems don’t get fixed quickly, and things like that,” he says.
UK projects begin to emerge
In West London, the government is bankrolling the Old Oak and Park Royal heat network for 9,000 homes and 250,000m2 of commercial space to the tune of £36m. Announced nearly five years ago as the first such UK project, it should go live in spring 2029, according to Charlotte Owen, growth director at heat network developer and operator Hemiko.
“We will start construction this year,” says Owen. “It is planned to harness heat from two datacentres initially, and more as the network scales. It will supply new-build developments, healthcare facilities and other buildings in Old Oak and Park Royal and around White City.”
The first phase is expected to deliver up to 95GWh of heat, in a partnership with Vantage Data Centres and the Old Oak and Park Royal Development Corporation (OPDC). Between 2028 and 2040, the project could heat up to 25,000 homes.
Hemiko has other projects in the works that involve colocating with datacentres. Meanwhile, it is busy providing letters in support of planning applications for datacentres in areas with existing heat networks, she says.
“But datacentres often suffer from nimby-ism, meaning lots are being built further away. What people don’t realise is that having them in their neighbourhood means they can benefit from cheaper energy bills,” adds Owen.
Still others are in the pipeline. Mark Lee, CEO of Deep Green, says its DG01 at Move Urmston Leisure Centre in Manchester is in commissioning and will begin to provide heat this summer.
“We believe it exemplifies what is possible and practical – a 400kW facility delivering continuous heat to the swimming pool, saving the centre an estimated £80,000 a year and 100-150 tonnes of CO2.”
“Beyond Bradford, we have a pipeline of over 100MW in potential UK projects, some of which we anticipate will be ready for service in 2027,” says Lee.
Regulatory and planning barriers
At a project level, every site is complex and requires multiple prerequisites to be aligned before moving into design and development. These include location, power infrastructure, connectivity, community impact, heat offtake, pricing and demand, he says.
It would be faster if UK planning processes could be accelerated and if there was a national framework that recognised the value of heat reuse in planning decisions and gave “clearer central guidance” to local authorities, Lee says.
Also, grid connection processes don’t yet have standard accounting for energy demand reduction.
“This is something distribution network operators and the government could address relatively straightforwardly, making a real difference to the viability of projects like ours,” Lee says.
In the EU, Germany’s Energy Efficiency Act mandates heat reuse but still faces pushback from datacentre operators.
Even when waste heat is classified as green energy, operators face additional challenges that include regulatory and sustainability compliance, and the costs that come with that. Also, the location of heat networks may not be suitable for a datacentre. In Germany, they’re typically not located near fibre connectivity – essential for datacentres – so the vision may yet be dialled back there, too.
In the UK, uncertainty remains. Not least because long-term contracts can tie datacentres into promises to provide a certain amount of heat even if their model changes, they change cooling method, they refurbish, or demand drops.
The temperature challenge
According to Ofgem, how datacentres will fit into the UK’s overall energy network supply picture is uncertain. Regulatory frameworks for this remain an emerging area, a spokesperson tells Computer Weekly.
So, it all feels quite risky to operators. Datacentres and energy networks will certainly have expectations of each other and what they need or should bring to the process.
Dominic Ward, CEO of datacentre operator Verne Global, says that although the idea of connecting datacentres to local heating networks is not new, the strategy remains “relatively underused”.
Capturing more than 30% to 40% of a datacentre’s waste heat remains extremely difficult. In theory, you can capture upwards of 80% of the heat. But in practice, it ends up being just 20% to 30%.
“One of the greatest challenges is the temperature,” says Ward. “Temperatures out of the datacentre environment are actually quite low. It can be around 30ºC at the bottom end.”
Compare the geothermal heating of Reykjavik, where you can transport excess heat a fair distance because it is well above 100ºC at source. Thermal energy dissipates quite quickly. You need “huge amounts of technology” to efficiently transport and transmit heat, he says.
Maybe underfloor heating only needs to reach 30°C to 40ºC, but with the efficiency of datacentre waste heat conversion at around 30%, the sums can be tricky. Living right next to a datacentre isn’t a palatable solution either, Ward notes.
Chris Larsen, chief technology officer at AtNorth, says while heat could be captured from cooling systems, heat pumps may be needed to raise the temperature enough to distribute heated water to a district heating network.
AtNorth’s FIN02 Espoo datacentre partners with retailer Kesko to heat a nearby store. By reducing reliance on fossil-fuel heating systems, they expect to cut CO₂ emissions by about 200 tonnes annually.
A collaborative future
But more integrated datacentre heat reuse projects, incorporating public-private partnerships and government policy support and incentives, are expected to spread across Europe more generally in the next three to five years, says Larsen.
“Research by EnergiRaven suggests waste heat from UK datacentres could heat at least 3.5 million homes by 2035. Energy Solutions Intelligence suggests that EU datacentre waste heat could provide 10% of EU heating needs by 2030,” he says.
Research by EnergiRaven suggests waste heat from UK datacentres could heat at least 3.5 million homes by 2035
Chris Larsen, AtNorth
“Future facilities will need to be deeply integrated into the communities and ecosystems around them for long-term sustainability.”
He says district heating remains the “most practical and impactful” option for waste heat reuse for a range of options that include supplying heat for industrial processes, horticulture (greenhouses) and aquaculture (fish farms), or heating infrastructure such as swimming pools.
Larsen adds that Nordic district heating projects already operate with lower temperatures. Meanwhile, the UK still largely relies on individually connected gas boilers – although that too may change as sustainability targets tighten and energy costs rise.
“Upgrading or evolving civic infrastructure is a long-term strategy that necessitates collaboration across governments, energy providers, industry bodies and local communities. Historically, economics and incentives have slowed adoption,” he says.
UK multi-party collaborations and strong partnerships must be built. It may be that datacentre operators won’t need to become energy suppliers themselves but could work with established suppliers, he says.
“An established energy company or municipal utility manages distribution, billing and customer relationships. This allows each party to focus on its core expertise,” says Larsen. “The idea that datacentre operators must become energy suppliers is a misconception.”
