Data centre waste heat is already abundant and predictable. That’s why Simon Kerr, Head of Heat Networks at EnergiRaven, believes the UK needs joined-up regulation, heat zoning, and early planning engagement to capture it at scale.

As artificial intelligence, hyperscale computing and cloud services fuel an unprecedented expansion in the number of data centres, there is an accompanying increase in the amount of waste heat produced by digital infrastructure. Harnessing this heat could help the UK strengthen energy security and support decarbonisation, provided the right frameworks and infrastructure are put in place.

Each facility produces a continuous, predictable flow of heat which, with vision and planning, could contribute to urban energy systems, reduce reliance on gas for space heating, and support grid stability at a time of rising demand.

Today, much of this heat is treated as a by-product, expelled into the environment and lost. But with the right infrastructure, a larger share of it could be used to supply homes and public buildings, and to support local heat networks.

With careful policy and national planning, each unit of low-carbon electricity could deliver more value – for example, once in a data centre for computation and again through useful heat in nearby buildings.

Learning from Scandinavia and charting our own path

Looking to our Northern European neighbours, Denmark and Sweden are demonstrating that heat reuse can work. Data centre heat flows into city-wide heat networks, reducing heating costs, gas consumption and exposure to volatile fossil fuel imports.

These outcomes are helped by alignment between policy, finance, governance and planning, creating an environment where connection is expected, investment is bankable and energy systems are coordinated.

However, it would be naive to assume the UK can simply copy Scandinavia. The UK is different: local authority powers are fragmented, heat zoning is inconsistent, and there is no obligation to consider heat recovery. The UK must develop its own blueprint, one that reflects our geography, regulatory landscape and existing infrastructure, and decide which approach will deliver the most practical results for UK citizens.

With ambition, joined-up planning and predictable funding, the challenge of cooling data centres could also become part of a broader energy opportunity.

How can we make this happen?

To get to a networked UK – where waste heat from data centre clusters in Slough, West London, Manchester and Edinburgh is fed into local heat networks to support homes and businesses – planning reform should treat data centres as strategic national energy assets. Every new facility should assess heat recovery potential, and early engagement with heat network developers should become routine.

Regulation should bring waste heat into mainstream energy policy, requiring large producers to report on and evaluate options to act on their waste heat potential. This should be supported by clear guidance from Ofgem, DESNZ and local authorities. Predictable frameworks for connection, supported by heat zoning, would reduce uncertainty for operators and help communities plan around available supply.

Meanwhile, establishing long-term capital frameworks and heat-purchase agreements would provide the commercial certainty required to accelerate adoption. This would encourage operators to treat heat as a managed output—valuable where there is a viable offtake route and a clear investment case.

To tie this all together, our mindset as a nation must shift towards seeing heat itself as a utility. This is already underway, with Ofgem set to start regulating heat networks from January 2026.

The practical barriers in our way

Integrating a new energy source at national scale is a daunting task, but it is something we have done many times before.

There are a number of measures we can take to realise this vision. We can task a central body with providing guidance to local authorities to help them build expertise; mandate that operators engage at the earliest stages of planning to enable cost-effective integration; and ensure “lessons learned” are collected and shared widely among all stakeholders.

We don’t need to look far to find examples of communities making heat recovery and usage work for them. Shetland Heat Energy and Power (SHEAP) is one example: by recovering heat from a local waste-to-energy plant, residents have benefited from reduced exposure to energy price shocks in recent years. The UK can overcome these challenges, but only with clarity and ambition. Early alignment of policy, planning and investment can turn heat recovery from a theoretical possibility into a deliverable, repeatable model.

A practical opportunity for operators

For data centre operators, heat reuse can create an additional revenue line in the right locations and, importantly, support decarbonisation objectives. Recovered heat can reduce cooling loads, improve ESG reporting, and strengthen investor confidence where delivery is measurable and contractual.

Early collaboration with regional heat networks can also improve project economics by aligning technical design, connection requirements and commercial terms from the outset. The operators best placed to benefit will be those that plan for heat export early, particularly in areas with dense heat demand and credible network development.

Operators who engage now may be better prepared as regulation evolves. Heat supply could become a stronger factor in planning decisions over time; planning early reduces risk and helps avoid costly retrofits.

Why the UK must act now

The stakes are high. Reusing data centre heat can reduce household heating costs, enable urban heat zoning strategies, and cut national gas demand – while supporting a rapidly expanding digital economy. As AI and cloud computing drive energy demand, aligning digital infrastructure with energy planning is a pragmatic opportunity that can be captured where the technical and commercial conditions are right.

The UK has the chance to turn a by-product into a useful local resource. By combining long-term vision with practical action, we can support a future where digital growth and decarbonisation can progress in parallel. The heat is already there – the question is whether we have the foresight to use it.

TechBuyer’s Astrid Wynne argues that as AI drives up cooling demand, water stewardship must become a core design principle – not an afterthought.

As artificial intelligence accelerates demand for data centre capacity, the conversation around sustainability is shifting. Energy efficiency has long dominated the agenda, but water, the silent resource underpinning cooling systems, has emerged as a critical concern.

Scoping the problem on site and throughout operations, and providing practical guidance to avoid extra strain on freshwater use, were key aims of The Data Centre Alliance’s Drowning in Data best practice paper, published in October 2025. Developed by leading industry experts, the paper explains how to avoid freshwater use, how to account for the water footprint of energy use, and how to maximise water efficiency in cooling systems.

Growing awareness of water scarcity

Water scarcity is no longer a distant threat. Today, four billion people experience severe water stress for at least one month each year, according to a 2025 World Economic Forum report. In the UK, the deficit between the infrastructure capacity to provide clean water and the demands placed on it by agriculture, housing and industrial needs is in the billions of litres a day. The growing number of data centres, and reports of their on-site water use, began to raise alarm bells in the mainstream press in early 2025.

With Keir Starmer’s announcement of projected ‘AI Growth Zones’ early in the year came articles from the BBC raising concern that the UK’s AI ambitions could lead to water shortages. While it is true that high-density computing drives up cooling requirements, there are also numerous technologies to address this.

Large evaporative cooling towers, which can consume tens of thousands of cubic metres a year, are not popular in the UK. By August, a techUK report had found that half of England’s data centres now use waterless cooling. Other reports also suggested that used water could be deployed to cool data centres.

Industry guidance

Just as with carbon emissions, data centre water consumption is an issue both on site and through the energy supply chain. The authors of the Drowning in Data paper recognised this early on and structured the guidance around water efficiency in the cooling system; the type of water drawn on site and how it can be treated; and the water footprint of the energy supply.

The paper shows that operators, vendors and policymakers are collaborating to tackle water use with the same rigour applied to energy efficiency—and recognises that it is a system with many moving parts.

The fundamentals of water stewardship

The paper outlines six actionable principles for reducing water impact. It also recognises that these are interrelated, and that they have a relationship with energy efficiency. A brief overview is given below:

1. Evaluate cooling systems
   Not all cooling systems are created equal. Designs for a 5 MW data centre in London that involve cooling towers can be around 38,000 m³/year, whereas adiabatic coolers can be around 800 m³/year, and dry coolers would result in no direct water use. Selecting the right technology can cut water use by orders of magnitude.
2. Minimise the water footprint of the energy used
   Beyond direct consumption, electricity generation carries an embedded water cost. No studies have yet defined the proportion for AI workloads, but studies on another intensive compute operation – Bitcoin – suggest that most of this sits in the energy footprint. Maximising energy efficiency, and using energy supplies with lower water footprints, is a key part of good water stewardship.
3. Design with the surrounding environment in mind
   Cooling systems must take into account the surrounding environment in order to balance savings in direct water use (through reduced cooling demand) with indirect water waste through increased electricity use overall.
4. Design with non-potable water in mind
   Grey water systems and rainwater harvesting can offset potable water demand, reducing strain on municipal supplies. However, different water qualities require different levels of electricity to make them suitable for cooling systems, and this needs to be considered.
5. Apply systems thinking
   The surrounding community’s needs also play a part. In water-stressed areas, reducing direct water use will be a priority. In cooler, wetter areas, priority may shift towards the benefits of heat generation from the data centre—captured by direct-to-chip cooling and fed into district heating systems.
6. Introduce circular economy principles for hardware refresh
   Extending IT equipment life and promoting reuse reduces embodied water in manufacturing – a hidden but significant component of total water impact. According to the Green Electronics Council, the manufacture of a single server requires 1,500–2,000 gallons of water.

Where next for water use in the data centre sector

Continuing press coverage in recent months shows that data centres are under scrutiny for their water use in a way that other sectors are not. A December 2025 article in The Guardian is one such example. With researchers increasingly turning towards the water footprint of AI, mainstream media is becoming more aware of indirect water consumption as a result of energy use.

No similar stories circulate about heavy industry or manufacturing, which are more established and more likely to fly under the radar. Whether or not this is fair is a moot point; water is the next frontier in data centre sustainability. As the industry scales to meet digital demand, water stewardship must become a core design principle, not an afterthought.

The Drowning in Data paper provides insight into how the sector can address this with an approach that balances operational resilience with environmental responsibility. However, it is just the start of a long, complex process of understanding impacts and balancing competing demands. The Data Centre Alliance welcomes suggestions and collaborations that can move the conversation forward. 

You can read the full paper and join the discussion at dcauk.org.

Waste heat from the UK’s latest crop of data centres could be used to heat at least 3.5 million homes by 2035, according to new research that argues the country risks letting a major low-carbon heat source go unused without investment in heat network infrastructure.

The analysis, produced by heat mapping organisation EnergiRaven in partnership with Danish energy and sustainability consultancy Viegand Maagøe, links projected growth in data centres to a significant rise in recoverable ‘waste’ heat. It estimates that data centres could provide enough heat for between 3.5 million and 6.3 million homes by 2035, depending on factors including the efficiency and design of future facilities.

The research lands as the UK grapples with two parallel challenges: the rapid expansion of energy-hungry digital infrastructure to support cloud computing and AI, and the long-running difficulty of decarbonising heat – still dominated by gas boilers across much of the housing stock.

EnergiRaven argues that many existing and planned data centres are located close to proposed new towns and to communities facing higher levels of fuel poverty, raising the prospect of linking local heat demand with a growing heat supply that would otherwise be rejected into the atmosphere.

“Our national grid will be powering these data centres – it’s madness to invest in the additional power these facilities will need, and waste so much of it as unused heat, driving up costs for taxpayers and bill payers,” commented Simon Kerr, Head of Heat Networks at EnergiRaven.

“Microsoft has said it wants its data centres to be ‘good neighbours’. Giving heat back to their communities should be an obvious first step.”

How Manchester could be an ideal pilot

The report points to Greater Manchester as one area where this alignment could be particularly strong. It notes plans for around 15,000 homes at the Victoria North development and a further 14,000-20,000 at Adlington, alongside clusters of fuel poverty.

At the same time, the analysis highlights a concentration of data centre infrastructure around the city region, including more than a dozen existing sites and four additional facilities planned. EnergiRaven argues that, in theory, this proximity could make it easier to connect heat sources and new developments – provided heat networks are planned early enough, and built at sufficient scale.

More broadly, the research suggests the same pattern appears across the UK: growth in data centres is expected to increase the amount of recoverable heat, but the ability to use it will depend on whether networks exist to move that heat into nearby homes and buildings.

How heat networks work

Capturing waste heat typically requires a heat network: insulated pipework that transports hot water from a heat source to buildings, where heat interface units (HIUs) can replace individual gas boilers. The report notes that waste heat recovery is widely used across parts of northern Europe, particularly in Nordic countries, where major sources of waste heat — including data centres, power stations and other industrial processes — are more routinely integrated into district heating systems.

In the UK, heat networks remain a comparatively small part of the heating mix, but policy has been moving to encourage growth. Some cities have already been designated as ‘Heat Network Zones’, where heat networks are assessed as the cheapest low-carbon option for decarbonising heat locally.

Regulatory changes are also on the horizon. Ofgem is due to take over regulation of heat networks in 2026, and new technical standards will be introduced through the Heat Network Technical Assurance Scheme (HNTAS), intended to improve consumer protections and investor confidence.

The Government’s recent Warm Homes Plan also includes a target to double the share of heat demand met by heat networks in England to 7% (27 TWh) by 2035, with a longer-term expectation that heat networks could supply around a fifth of all heat by 2050. It also pledges £195 million per year through the Green Heat Network Fund to support heat network development.

However, EnergiRaven argues that current policy settings still fall short of what would be needed to take full advantage of large-scale waste heat from data centres.

“Current policy in the UK is nudging us towards a patchwork of small networks that might connect heat from a single source to a single housing development. If we continue down this road, we will end up with cherry-picking and small, private monopolies – rather than national infrastructure that can take advantage of the full scale of waste heat sources around the country,” Kerr added.

“We know that investment in heat networks and thermal infrastructure consistently drives bills down over time and delivers reliable carbon savings, but these projects require long-term finance. Government-backed low-interest loans, pension fund investment, and institutions such as GB Energy all have a role to play in bridging this gap, as does proactivity from local governments, who can take vital first steps by joining forces to map out potential networks and start laying the groundwork with feasibility studies.”

A “heat highways” argument — and what it would change

A central recommendation in the analysis from EnergiRaven is the need for larger, strategic networks – which it describes as ‘Heat Highways’ – capable of transporting waste heat over longer distances and linking multiple sources and demand centres. The report suggests that smaller, isolated schemes may struggle to exploit the growing scale of data centre waste heat, particularly as facilities cluster in certain regions rather than being evenly spread across the UK.

Viegand Maagøe’s Peter Maagøe Petersen argues that building larger thermal networks could also provide benefits beyond household heating, including grid balancing and energy security.

“We should see waste heat as a national opportunity. In addition to heating homes, heat highways can also reduce strain on the electricity grid and act as a large thermal battery, allowing renewables to keep operating even when usage is low, and reducing reliance on imported fossil fuels. As this data shows, the UK has all the pieces it needs to start taking advantage of waste heat – it just needs to join them together,” he noted.

“With denser cities than its Nordic neighbours, and a wealth of waste heat on the horizon, the UK is a fantastic place for heat networks. It needs to start focusing on heat as much as it does electricity – not just for lower bills, but for future jobs and energy security.”

The underlying message from both organisations is blunt: data centre growth is already being planned and powered. The question is whether the UK will treat the heat those facilities inevitably produce as a resource – or continue to design energy infrastructure that ignores it.

Peter Schwartz, Senior Technology Consultant at OryxAlign, explores how operators can use AI, modern cooling, and cleaner power to balance rising compute demand with genuine sustainability progress.

The swift integration of AI in sectors like healthcare and manufacturing has only increased pressure on data centre infrastructure. Energy consumption is high from the outset when training large models, remaining vast after deployment due to inference cycles.

The steady demand for AI adds persistent pressure on facilities. Already, data centres are moving workloads into large-scale cloud platforms (hyperscale) or mixed (hybrid) cloud set-ups. As more activity becomes centralised, power and cooling demands in these facilities grow. This prompts operators to identify solutions that support expansion while meeting sustainability goals.

The search for innovation

Innovative thermal and power handling strategies serve as one answer for operators. These advanced methods act in parallel to align environmental efficiency with increased compute density.

Liquid cooling, for example, which was previously associated with high-performance computing (HPC) deployments, is now used broadly across facilities in thermal management for high-density racks. Systems built with dielectric fluids or direct-to-chip water channels move heat more efficiently than air cooling systems, allowing for higher rack densities and a reduced burden on traditional air-handling units. These methods also make it possible to build compact facilities that need fewer mechanical parts compared to their counterparts.

AI also operates counterproductively, driving much of the sector’s energy demand. Yet, it also supports new smarter thermal controls which help to stabilise conditions and reduce energy consumption in dense compute zones. AI-driven cooling interprets sensor data to adjust environmental conditions in real-time, especially as workload intensity picks up. This approach reduces unnecessary cooling activity, allowing for precise environmental control across the facility, which is especially valuable for AI training zones that experience rapid shifts in thermal loads.

Sustainability gains also hinge on cleaner power sourcing. Power Purchase Agreements (PPAs) support operators in switching to renewable energy sources like solar, wind and hydropower, becoming popular investments to future-proof facilities. Some data centres are now built alongside renewable assets to cut transmission losses and gain clearer insight into their electricity’s carbon profile.

Alongside these strategies, interest has grown in on-site microgrids, battery energy storage systems (BESS) and hydrogen fuel cells. Such innovations provide cleaner power that lowers dependence on legacy grids powered by fossil fuels. But these solutions do not guarantee long-term scalability and viable costs, making them harder to access, especially for smaller organisations with less land and capital compared to hyperscale providers.

Driving change through cloud

Major cloud companies also influence sustainability efforts across the sector. Microsoft and Amazon Web Services operate at a scale that places them among the world’s largest electricity users, but it also positions them as prominent low-carbon advocates. Their procurement models, certification pathways and carbon neutrality commitments are setting expectations across the sector, for both colocation partners and new policy discussions.

These providers encourage transparency and accountability through open-source design work and shared framework promotion. Efforts like carbon-aware computing, where workloads shift to periods or regions with cleaner energy, indicate a move towards more digital infrastructure tuned for sustainable performance.

However, this progress from hyperscalers emphasises a divide across the industry. Since larger businesses secure large renewable energy agreements and invest in specialised cooling systems at a pace smaller businesses cannot match, sustainability becomes a competitive differentiator, rather than a common baseline to aim for.

Legacy over longevity

Progress towards a sustainable future and data centre expansion is also limited by the existing infrastructure. Many regions operate with legacy grids that are not equipped to support current growth patterns, and new grids face installation delays because of regulatory processes or aging network capacity. Such constraints have already led to development delays in countries like Ireland, where the gap between digital expansion and physical systems lies exposed.

Financial pressures also shape progress. While green technologies offer lower long-term expenses, the upfront spend for retrofits and renewable power agreements or advanced cooling is high. Cost differentiators are most notable in regions that focus on price/performance when making procurement decisions, because operators in these markets work with tight margins and limited incentives which outweigh the long-term gains.

These global differences only increase friction. Regions with cheaper carbon-intensive electricity or limited regulatory policies see fewer reasons to commit to sustainable upgrades, which produces uneven progress instead of a unified movement within the sector.

What comes next?

A future driven by green data centres depends on coordinated progress. Utility managers and grid operators need plans aligned with policymakers, and manufacturers that work closely with cloud architects to ensure data centres can grow while minimising environmental impact.

Innovations must also coexist with these changes. Hardware and facility design must be combined with software that can steer workloads, with increased value placed on accurate responses to environmental conditions. Demand for AI in these scenarios will increase, however it also offers tools that will support more efficient energy use and flexible load management.

We need green data centres for a digital economy aiming to grow without intensifying climate pressures. It’s a multifaceted route to sustainable development, but with shared commitment and targeted design and innovation, operators are given a realistic way forward.