Waste heat is usually treated as a nuisance, but with ground source heat pumps and heat networks, data centres could become local low-carbon heat suppliers, argues Chris Davidson, CTO at Genius Energy Lab.

Data centres are the invisible engines of modern life. They keep our digital world running: from streaming films and hosting Zoom calls to enabling AI breakthroughs and online banking. But they’re also under the spotlight for one big reason: energy use.

The UK already hosts one of Europe’s largest data centre markets, with demand forecast to grow by nearly a fifth in the next three years. As the sector expands, so do concerns about its carbon footprint. Cooling technologies are already efficient, but there’s an opportunity that could help shift the sector’s impact locally: waste heat.

The untapped opportunity in waste heat

Every server rack generates heat. In most facilities, that heat is treated as a problem – ejected into the air and wasted. But with the right infrastructure, it can be captured, upgraded, and reused as a local energy source.

Cooling in data centres in the UK climate is very efficient and GSHP wouldn’t significantly increase this efficiency. But by being able to take the heat from a data centre and feed it into a local heat network, that could drive down the heating costs of homes and other businesses in the area.

This is where ground source heat pumps (GSHPs) and district heating networks come in. By pairing data centres with GSHP-enabled networks, operators can turn waste heat into low-carbon energy for nearby homes, businesses, and public buildings.

The principle is simple:

• Capture the low-grade heat from data centre cooling systems.
• Store and balance it through underground boreholes or aquifers, effectively turning the ground into a thermal battery.
• Upgrade the temperature with heat pumps to deliver usable heating and hot water.
• Distribute it into local heat networks, supplying end users.

Instead of being a liability, data centre heat can become part of the clean energy transition.

Real-world examples

This isn’t just theory – projects in the UK and Europe are already showing what’s possible.

Old Oak & Park Royal, London One of the UK’s first large-scale schemes is underway in West London. Waste heat from local data centres will be recovered and fed into a new district heat network, supplying around 95 GWh of low-carbon heat each year. That’s enough for 10,000 homes and 250,000m² of commercial space. Backed by government funding through the Green Heat Network Fund, the project is an example of how digital infrastructure can also support local energy infrastructure.

Tallaght, Ireland In Dublin’s suburbs, waste heat from a local data centre is being captured and reused via a district heating system. Heat pumps raise the temperature to usable levels, reducing reliance on fossil fuels and showing how lower-grade heat can be transformed into a stable energy supply for whole communities.

Across Europe the potential is substantial. The European Data Centre Association (EUDCA) estimates that waste heat from European data centres could provide 221 TWh annually by 2025: equivalent to around 12% of total EU heating demand. With many facilities located within just a few kilometres of heat networks, integration opportunities are widespread.

The business case for operators

Data centres are under growing scrutiny. Beyond carbon, communities and regulators are raising concerns about their environmental footprint – from heavy water use for cooling to the strain they place on national electricity grids. In Dublin, a moratorium on new data centres reflects the pressure on Ireland’s energy system, while in the UK local opposition has grown, with residents in Potters Bar objecting to a £3.8bn cloud and AI centre planned for greenbelt land.

The industry is keen to show it is ‘fixated with becoming as sustainable as possible’, as Stephen Hone of the Data Centre Alliance put it, with new dry-cooling methods and efficiency gains. But for many stakeholders, promises of future innovation are no longer enough. Delivering visible, tangible benefits, like turning waste heat into a local energy source, is one way to address those concerns today.

Heat recovery can also make commercial sense:

• Carbon reduction and ESG impact
  Turning waste heat into usable energy creates a tangible decarbonisation story. For investors, regulators, and customers, it can help demonstrate progress beyond efficiency alone.
• Community goodwill
  Data centres often face scrutiny in planning processes. Demonstrating that a facility will deliver low-carbon heat for local homes and businesses can help build trust and strengthen relationships with councils and communities.
• Policy alignment
  The UK government is backing heat networks as part of its net zero strategy, with schemes like the Green Heat Network Fund providing financial support. For operators, this creates a policy environment that can support early projects.
• Resilience and risk management
  As disclosure frameworks tighten and ESG requirements harden, operators that integrate heat recovery can be better placed to manage regulatory risk and avoid being seen as part of the problem.

Barriers and enablers

Of course, integrating data centres into heat networks isn’t without challenges.

• Proximity matters: Recovered heat only works if there’s demand nearby: ideally dense residential or mixed-use developments.
• Temperature upgrades: Waste heat is often low-grade and needs GSHPs to boost it to usable levels.
• Commercial agreements: Operators and heat network providers must share risk, guarantee supply, and manage demand profiles.
• Funding support: Heat network infrastructure requires upfront capital. Public sector programmes and local authority partnerships often make the difference.

Fortunately, each of these challenges is surmountable with the right technical design, policy framework, and collaboration between operators, developers, and energy specialists.

Why it matters now

The growth of AI, cloud computing, and digital services means data centre demand is only heading in one direction: up. As the sector scales, so will the scrutiny on its carbon footprint.

At the same time, cities are under pressure to decarbonise heat – the single largest source of emissions in the built environment.

Data centres sit at the crossroads of these two trends.

They can either remain energy-hungry liabilities or play a role as local clean energy providers. There are many data centre companies now putting up much smaller and local data centres – think the size of a house – and these could work well on a heat network.

The opportunity is clear. By capturing and reusing waste heat, operators can transform their role in the net zero transition: from energy users to energy providers.