Recycling Heat From Data Centers Is Enticing, But Experts Say It's Mostly Hot Air

Data centers produce a tremendous amount of heat, and some recent examples of recycling that heat for other uses have begun to generate buzz across the U.S. and Europe. But experts say these strategies, while appealing, aren't likely to become widespread in the near future.

From heating homes and greenhouses to drying lumber, developing ways to recycle the heat produced by the equipment inside data centers has become a prominent part of the sustainability conversation around digital infrastructure, drawing headlines in major outlets from The Wall Street Journal to the BBC. 

It is easy to understand why, particularly as the public becomes more aware of the environmental impact of the massive energy use underpinning our increasingly digital lives. A 100-megawatt data center converts around 90% of that energy into heat — why wouldn’t that be put to use, sold or given away?

The idea that energy powering our digital lives can be offset by a business model where data centers provide carbon-free home heating or power to a range of industrial uses presents a graspable, intuitive narrative. 

But while scattered examples of waste heat reuse have been implemented — mostly in Europe and typically to significant fanfare — experts say that widespread reuse of waste heat is unlikely in the foreseeable future, particularly in North America. This is due, in part, to physics: The way most data centers release heat is difficult to repurpose.

But even when the physics work, the economics often don't. 

Emerging changes in how data centers are designed may make heat recycling more economically viable, and experts expect more examples of heat reuse to pop up as sustainability initiatives. But there is a general consensus that recycled heat isn't about to become a standard part of the operating or business model for the data center industry. 

“There will be more of this than there used to be,” said John Sasser, chief technology officer at Sabey Data Centers, speaking at Bisnow’s National DICE Data Center Management, Operations and Cooling Series earlier this month. “It won't be everywhere.

“But economics drives all of this. For the large data centers, you may be able to do something where it makes sense to export the heat, especially in an urban environment and maybe for some industrial uses. Monetizing it is tricky, and having an adjacent facility to your data center that is close enough to take advantage of that waste heat and still works for security and still works for all the other things that go into the data center is tricky.” 

A number of companies touting novel uses for data center heat have generated headlines over the past year. This month, a company called Deep Green received widespread coverage for using heat from a micro data center to heat a municipal swimming pool in the UK, a move it says will save the local government $24K annually. Canadian operator QScale also received media attention for using waste heat to warm greenhouses. 

While proposed commercial uses for data center waste heat have ranged from farming eels to drying lumber and growing cannabis, by far the most common way data center heat is being recycled is to heat homes.

Throughout northern Europe, particularly in Nordic states like Norway and Sweden, home heat in urban areas is often provided through a local utility that provides heat through a water-based heat pump system called a district heating loop. In cities like Oslo, Stockholm and Helsinki, governments have incentivized data center operators to feed their waste heat into these district heating loops. 

It is a trend that is spreading to other European data center hubs. Amazon Web Services just connected a data center-to-district heating loop in Dublin, while QTS linked one of its data centers to a heating system in the Dutch city of Groningen.

Unsurprisingly, data center operators have been quick to tout these efforts, and press coverage has often presented heat reuse as a potential model for digital infrastructure where business interests align smoothly with sustainability goals. “A win-win,” in the words of a recent Axios story. 

But the reality is less encouraging. Experts say that this kind of symbiosis is rare, particularly outside of Europe. 

“It's a really interesting concept, but there are some barriers in place,” said Travis Wright, vice president for energy and sustainability at QTS.  

For starters, heat is only a valuable commodity in locations with cold climates, and even then, there is only demand for part of the year. There is also the fact that the end user of the heat — whether a home, greenhouse or swimming pool — needs to be physically close to the data center.

In the U.S. and Canada, where data centers tend to be farther from residential areas than in Europe, this makes home heating an even less plausible use in most cases, even if municipalities did want to foot the enormous cost of establishing district heating systems. 

“In the United States, things are much more spread out, and there's not a whole lot of data centers right next to residential neighborhoods that are using pumped water for their heat source,” Wright said. “It’s mostly electrification for heat and cooling, and so the need for reuse is just not there.”

Yet even in cities like Stockholm where data centers are located near potential users of their waste heat and where the infrastructure is in place to make sharing that heat possible, industry insiders said sharing waste heat typically doesn’t make sense from a pure business perspective. 

“They get installed and they operate, but when you talk with the operators that have them — and I've had some conversations with operators in the Nordics — they're not economical, and they're not making money on them,” said Jay Dietrich, research director for sustainability at the Uptime Institute. 

At the root of the problem is the fact that most data centers don’t produce heat that is actually very useful to third parties. The vast majority of data centers are cooled using circulated air, meaning heat leaves the data center as hot air, so-called low-quality heat that is both inefficient and expensive to capture and transfer into a district heating system or for any other use.

Converting heat in an air-cooled data center requires a significant capital investment to install heat exchangers and other equipment to capture, concentrate and transport it to where it could be used for heating. 

As a result, even widely adopted models for heat reuse like district heating are generally only viable in locations where government subsidies make up for the added expense for operators.  

“The incentives that the governments provide allows it to be a financially stable model, one that actually works,” said QTS’ Wright, adding that local subsidies made the company’s heat reuse project in the Netherlands possible. “They essentially built a heat concentration plant so we can deliver this relatively low-quality heat. It’s concentrated through a heat pump process, then they can deliver that to sources nearby.” 

And even as distributing waste heat often makes little economic sense for data center providers, municipalities and other potential consumers are increasingly deciding that pulling heat from air-cooled data centers just isn’t worth the trouble.

In January, German lawmakers were considering a bill that would mandate data center heat reuse. But the bill was withdrawn after local governments determined that the investment needed to create the infrastructure to capture that heat made the plan economically unfeasible. 

Despite these obstacles, experts point to one trend that could make heat reuse more viable. Data centers are increasingly utilizing liquid-cooling systems, piping liquid refrigerant into cooling plates attached to servers or into plates and pipes integrated into the computing equipment itself. In other cases, specially designed servers are fully immersed in a cooled, nonconductive refrigerant. It is a trend driven by the need to cool more powerful chips to support artificial intelligence and other computing tasks, and experts say it makes heat reuse far more economical. 

“It becomes a pretty simple heat transfer mechanism because you don't have to concentrate — you're just taking it through a heat exchanger,” Uptime’s Dietrich said. “The economics become way better.”

Indeed, wider adoption of liquid cooling has fueled a handful of heat reuse projects in North America, largely focused on using waste heat for greenhouses and other agricultural use. In Wyoming, the ease of heat reuse from liquid cooling is front and center in the marketing for Wyoming Hyperscale Whitebox, a proposed development that plans to use waste heat for both agriculture and industrial uses. Quebec’s QScale also utilizes liquid cooling for its greenhouse partnership. 

But while the idea of data centers driving carbon-free food production through their waste heat may be appealing, industry insiders say such ventures generally only make sense as demonstration projects or as sustainability initiatives. In an industry that is starved for developable land, any adjacent parcel that could be used for drying lumber or growing apples would almost certainly be more profitable as more data center space. 

“It’s a decision every data center operator has to make when they are looking at ancillary activities,” Dietrich said. “It’s the same as taking a portion of your land to put down a solar farm: You're making a trade-off versus having it available for an expansion. For most data center operators, it's not part of your business plan.”