Data centres must reclaim excess heat?

Pressure is mounting on data centres and district heating companies to utilize excess heat and include feasibility of heat extraction as a key criterion when selecting geographical locations. And while the EU regulations do not look likely to force the implementation of heat extraction for all existing sites – demands to assess and consider heat recovery are increasing.

Server racks in server room data center. 3d render
Article published on January 04, 2023
The massive potential in recovering heat from data centres is currently underutilized across Europe. Excess heat may be used for food production, industrial purposes – or integrated into the district heating networks to heat up homes and buildings, while displacing fossil fuel sources.
This potential is also being recognized across Europe, where political and regulatory pressure is starting to converge on heat recovery as a key lever to achieve truly sustainable data centres. We can see pressure on the data centres to integrate heat recovery forming across three dimensions:
The driver of this pressure is a combination of ambitious international and national climate targets, increasing consumer awareness, company sustainability targets, investors, and external stakeholders.
How are the EU pushing for heat recovery at data centres today?
In the Digital Decade strategy, the EU states that it should take the lead in making data centres climate neutral and energy efficient by 2030, and that the excess energy of the data centres should be recovered1. To achieve this, a number of directives, and instruments have been applied at a European level, guiding the industry and national regulators, and more are expected to come. The European directives will, if passed, affect data centre operators in all member states.
‘Fit for 55’ pushes the green agenda for data centres
To ensure that EU policies are in line with the climate goals, the EU has developed the ‘Fit for 55’ package. The package is a set of legislative proposals and amendments to the existing EU legislation that focuses on areas important to reach the climate goal.2 Two of the key areas which will affect the data centres and their recovery of excess heat are revisions of the Energy Efficiency Directive and the Renewable Energy Directive.
In September 2022 the two directives were adopted by the European Parliament, but both are still being considered by the European Council. It is expected that an adoption will happen by the end of 2022 or 2023. Once they have been adopted by the EU, a deadline will be set before which each member state must have incorporated the directives into national law.
Energy Efficiency and Renewable Energy
The Energy Efficiency and Renewable Energy directives (EED and RED) include articles, which will influence and promote heat recovery for data centres across Europe. The proposal includes specific demands for data centres, which will make it a requirement for future data centres with a total energy input exceeding 1 MW to recover excess heat and deliver it to the district heating network unless they can prove that it is not technically or economically possible. This will make it mandatory for data centres to, at a minimum, assess the feasibility of heat recovery at their sites. Additionally, the proposal includes articles which may indirectly promote heat recovery for data centres. It is proposed that the proportion of excess heat in district heating and cooling should increase from 1% to 2.1%, which will push district heating companies to look for additional excess heat sources. As such, Fit for 55 includes incentives/requirements for both the heat provider (data centres), and the district heating company, which should facilitate more collaboration in the future. Finally, the directives push for members states to encourage local heating and cooling plans and setting up coordination frameworks between district heating operators and excess heat providers.
Other European initiatives pushing for heat recovery and data center sustainability
In addition to the ‘Fit for 55’ package and related directives, EU has several other initiatives to push data centers to becoming more sustainable. The EU’s ecodesign regulation on servers and data storage products seeks to limit the environmental impact of B2B computers typically found in data centres with different rules considering energy efficiency3 .
EU green public procurement criteria have been developed to facilitate green requirements in public tender documents. Specific to data centres, there is a focus on ensuring that data centres operators procure equipment and services in a way that take environmental improvements into consideration4.
The EU Taxonomy Regulation has a section on data centres in which it is described that to substantially contribute to climate change mitigation the data centre must have implemented expected practices stated in the European Code of Conduct on Data Centre Energy Efficiency and have those activities verified by a third-party5.
What are countries in the EU working on?
In addition to the directives and regulations from the EU, some countries already have, or are proposing, initiatives to promote heat recovery from data centres. There are examples below from a few selected countries.
Specific initiatives/cases:
In Denmark, the tax on excess heat from electrical processes has been removed to promote the recovery of excess heat from data centres and other electrical based industries. Furthermore, a new price regulation on excess heat has been implemented, which will remove some of the administrative burden from the suppliers of excess heat6 . In general, it has been made easier and cheaper for data centres to supply heat to district heating networks. There are not yet any requirements in Danish law for the data centres to recover their excess heat, but there is, however, a political focus on the area.
One municipality has expressed disappointment with data centre providers that will not implement excess heat recovery7 and in Aabenraa they have developed a local strategy on data centres, which stipulates that they will work to exploit the excess heat8 .
Meta in Odense is a well-known example of successful heat recovery. The data centre has been coupled to Fjernvarme Fyn’s district heating network and is supplying around 7,000 households with their excess heat9 .
In 2021 a new version of the national data centre strategy was launched, which proposed to make it a requirement for new and planned data centres with capacity of more than 2 MW to assess the potential to utilize excess heat. However, it will still not require data centres to utilize the excess heat, even if the assessment shows that it might be economically viable10 . The proposal to implement this in Norwegian law is currently being processed11 . Additionally, the Norwegian government has created a map12 of district heating stations, data centre locations and the national demand for heat, which should assist data centres to select sites where heat recovery is most feasible.
In one example of excess heat recovery from data centres in Norway, the operator, Green Mountain, and trout farm operator, Hima Seafood, entered an agreement in 2021 to recover the excess heat and use it for Hima Seafood’s trout farm. The construction will be fully operational in 2023 and will lead to huge cost savings for Hima Seafood and to a reduction in Green Mountain’s environmental footprint.
The Netherlands is another highly popular destination for data centres. As a result of public disapproval, the municipalities Amsterdam and Haarlemmermeer announced a yearlong ban on new data centres in 2019 while new policy measures were developed. The new policy measures specified that data centres were now, among other things, required to explore the use of excess heat for heating nearby homes13. At the beginning of 2022, the Dutch government announced that it would halt hyperscale data centres for nine months while working out new rules that would create tighter national control with strict licensing within the area. The new rules are still in progress, and it is therefore unknown exactly how the data centres will be affected. There have been plans for various data centres in and around Amsterdam to recover heat for the local district heating networks. One example of an active project is NorthC’s Aalsmeer data centre south of Amsterdam, which recovers heat and supplies it to local off-takers, including a swimming pool and school.
With the “Act to Enhance Energy Efficiency, Improve Climate Protection and Implement EU Legislation” (Energieeffizienzgesetz, EnEfG) draft from October 2022, the German government sets out a legal framework for data centres which, in addition to strict demands on overall energy consumption, includes mandatory reuse of excess heat. It is specified that 30% of excess heat for data centres that start operations from January, 2025, and 40% for data centres that start operations from January 2027 must be reused14. The draft has received significant criticism from industry groups, and it is not certain if, or when, the regulations will become effective.
Frankfurt is a hub for datacentres in Germany, and in 2021 a pilot project started to recover waste heat to supply 1,300 apartments. In the area around Frankfurt, other data centre providers have also expressed intents to set up sustainable data centres, including heat recovery capabilities.
What joint initiatives are the data centre industry implementing today?
The data centre industry has developed its own voluntary initiatives, in addition to national and regional regulations, to make the data centres more sustainable. These voluntary standards are likely to become market norms, and de-facto requirements for data centre operators. Two examples are the Climate Neutral Data Centre Pact and Data Centres Code of Conduct, both of which cover excess heat recovery.
Voluntary standards:
Climate Neutral Data Centre pact
The Climate Neutral Data Centre pact (CNDCP) is a selfregulatory initiative within the EU, in which signatories commit to being climate neutral by 2030. The CNDCP highlights heat recovery as one of five enablers to achieve climate neutrality. Today, the pact has 100 signatories, including operators, data centres and associations representing more than 90% of the industry in Europe. One of the initiative’s focus areas, Circular Energy System, explains how data centre operators will explore the opportunities that lie in connecting with district heating networks to see if it is “practical, environmentally sound and cost effective”15 .
Data Centres Code of Conduct
The Data Centres Code of Conduct is another voluntary initiative and was established as a reaction to the increasing energy consumption in data centres. The code of conduct sets ambitious voluntary standards for its 153 participants and is managed by the Joint Research Centre, the European Commission’s science and knowledge service. The goal of the code of conduct is to make the owners and operators of the data centres reduce the energy consumption of the centres without hindering their mission critical function. The participants sign a registration form in which they commit, for example, to identifying opportunities to save energy through an initial energy measurement and energy audit, and prepare and submit an action plan for energy savings. The code of conduct has a section focusing solely on the reuse of excess heat and proposes initiatives such as evaluating the possibility of providing grade heating to industrial spaces or other targets and, if the temperature of the excess heat is too low, to install heat pumps to raise temperatures to a useful point. These actions are expected for any data centre build or retrofitted from 2011 and onwards16 .
Insufficient framework conditions and lack of incentives are key barriers to utilizing the full potential of heat recovery from data centres. However, across both national and regional regulations and voluntary standards, things are changing. Pressure is mounting on data centres and district heating companies to utilize excess heat and include feasibility of heat reuse as a key criterion when selecting geographical locations. And while the EU regulations do not look likely to force the implementation of heat recovery for all existing sites – demands to assess and consider heat recovery are increasing, which is particularly reflected in the regulatory developments in Germany and Norway. In the future, we see excess heat recovery at data centres becoming a license to operate – driven by the combination of regulatory demands, industry-imposed standards, and client demands. This will require data centre operators to venture into a new area, far from the existing core business, to become more sustainable.

View all
  • Amager Bakke photo shoot