Data centre operators are reframing "waste heat" as a valuable resource, with innovative projects already underway to warm cities and grow food. Companies like Beyond.pl are partnering with heating networks to potentially supply up to 15% of a European city's winter heating needs.

But can regulatory hurdles and infrastructure costs be overcome to make these sustainable solutions commercially viable?

It’s no secret that data centres waste heat is a growing issue, with increasingly intensive workloads requiring vast amounts of air to keep them cool and clear of debris. While in the past, this heat would be traditionally discarded, it’s increasingly being recognised as a valuable resource for powering nearby communities and businesses.

With operators looking to proliferate their circular economies, waste heat is becoming increasingly important for sustainability and energy efficiency — and also potential revenue opportunities.

• David McAuley, founder and CEO - Bitpower (moderator)
• Rosalyn Cheetham, development director - P3P Partners
• Piotr Kowalski, head of innovation/managing director - Beyond.pl/Polish Data Center Association
• Tiina Davidsainen, development manager - Fortum
• Cara Mascini, chief sustainability officer - Switch Datacenters

The Datacloud Energy & ESG panellists called for a terminology shift, arguing that waste heat has negative connotations and impacts its optics.

Cara Mascini, chief sustainability officer at Switch Datacenters, said her firm doesn’t like using the term waste heat, preferring to frame it as ‘green heat’ or a ‘data thermal solution.’

Piotr Kowalski, head of innovation at Beyond.pl and managing director of the Polish Data Center Association (PLDCA), described the process as a “side product of data processing”.

Tiina Davidsainen, development manager at Finnish state-owned energy company Fortum went one step further, suggesting the term could be misinterpreted by some as an incineration process, where operators burn waste to make heat.

Semantic arguments aside, the idea of reframing the concept of waste heat from data centres comes as operators are looking to offer up their heat output as a product.

Such efforts are like those being done by Kowalski and Beyond.pl, which is working with a district heating network operator in the city of Poznań on a proposed 30-60MW heat recovery project that could supply up to 15% of the city’s heating needs in winter.

Kowalski explained: “While redesigning our data campus for AI and liquid cooling loads, we noticed the immense potential of high-grade heat quality that we will be generating, and originally would be just pushing it to the air, as most of the data centres usually do.

“We reached out to a local district heating operator, Veolia and invited them for a project where we would work together to recover that or capture heat from the data centre and push it to the district heating network to cover up to 100% of heat requirements for 500,000 population city.”

However, despite the clear benefits of heat reuse, integrating data centre heat into district heating networks is not without challenges.

Kowalski acknowledged that while the Poznań project is promising, it remains a multi-year effort. Permitting alone can take up to two years, as district heating companies and regulators navigate infrastructure upgrades, financial structuring, and compliance with national and EU energy directives.

Davidsainen, whose company Fortum is behind the world’s largest data centre heat recovery project, emphasised that while district heating networks are widespread in Finland and other Nordic countries, they are still underdeveloped in many parts of Europe.

She argued that the high capital expenditure (CapEx) required to lay underground pipes remains a major barrier, particularly in regions where district heating infrastructure doesn’t already exist.

“It's not rocket science — it’s just water pipes underground, but it’s expensive,” she said. “That’s why distance matters. The longer the pipe, the more costly it gets.”

While much of the discussion focused on using waste heating to warm nearby homes, other industries are also looking to tap into data centre heat.

Cheetham from P3P Partners highlighted an alternative use case: agriculture. The company, which owns the largest tomato-growing operation in the UK, is exploring ways to replace gas heating with recovered data centre heat.

“As a horticultural sector, we need heat to grow food, and right now we’re burning gas to generate that heat through either CHP or boilers,” she said. “Supermarkets and consumers are pushing us to keep food prices down but also reduce our carbon footprint, and we can’t do that alone.

“There has been probably a lack of innovation and a lack of reaching out to other sectors, and I see this as a fantastic opportunity to tie in with data centres.”

Greenhouses aren’t the only possible beneficiaries. Kowalski pointed out that warehouses, factories, and pharmaceutical companies all have high heat demands and could become viable off-takers if temperatures can be raised to industrial levels using heat pumps.

“We’re already seeing improvements in heat pump technology,” Davidsainen added. “If we can bring recovered heat to the necessary temperature levels, we could see data centres playing a bigger role in decarbonising industrial heating.”

For data centre heat recovery to scale, the panel of experts agreed that greater collaboration between operators, municipalities, and industries is needed.

While some European governments, such as Germany, have mandated heat recovery for new data centres, most jurisdictions lack incentives or clear frameworks for integrating waste heat into national energy strategies.

Cheetham argued that government support will be crucial. “We need financial incentives, grants, or tax breaks to make it feasible for both data centres and heat off-takers.

“But that takes time to implement. What we can do now is start working together across industries to find practical solutions.”

Kowalski noted that in Poland, some district heating operators are willing to pay for waste heat, particularly during winter when demand is high. This could help data centres offset costs while contributing to the decarbonisation of heating networks.

With data centre power consumption growing, particularly with the rise of AI workloads, the need for innovative energy solutions will only become even more pressing.

The panel from Brussels all agreed that heat recovery presents a win-win opportunity — reducing energy waste for data centres while lowering emissions for cities, industries, and agriculture.

However, the panellists also agreed that the successful implementation of waste heat projects requires early planning.

“Heat reuse shouldn’t be an afterthought, it should be part of site selection from the start,” Davidsainen stressed.

“We need government support and incentives,” Cheetham added. “The best thing we can do is come together and collaborate with different industries and different sectors and start having the conversations to work out the problems that we all have because there are shared benefits.”