TL;DR

• The Huge Potential of Waste Heat: Liquid-cooled AI data centers generate massive amounts of heat that, instead of being uselessly vented into the atmosphere, can be efficiently captured using established heat exchanger technology and redirected to local district heating networks.
• Massive Efficiency Gains: Properly implemented heat recovery systems could drastically reduce global energy waste, tapping into an estimated 3,100 thermal terawatt-hours of wasted heat annually to potentially save up to €140 billion worldwide.
• Geographic and Contractual Barriers: While the technology is readily available, the main hurdles to widespread adoption are the physical distance between data centers and municipal heating networks, alongside the complex contracts needed to manage fluctuating, seasonal community heat demand.
• Regulatory and Community Incentives: Forward-thinking operators can leverage this opportunity to improve sustainability and benefit from new government incentives, such as European tax exemptions for reusing heat, while establishing themselves as valuable, environmentally responsible community neighbors.

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Data centers, especially those powering AI, generate vast amounts of heat. But that heat doesn’t have to be wasted: using well established technology, it can be recovered and reused in heating and hot water systems. Ulrik Vadstrup, HVACR Segment Manager for ABB asks why, in a sector built for speed, are so many data centers slow to take up this opportunity?

Picture a cruise ship gliding through Arctic waters – on-deck swimming pools steaming in the frigid air. On the surface, this looks incredibly wasteful: how much fuel must the ship need to burn to keep multiple pools hot in such freezing conditions?But in fact, this is an incredibly efficient use of energy. A cruise ship’s engines generate huge amounts of heat as a matter of course. With nowhere to go, that heat would make the engine room and surrounding gangways unbearable for the crew, and could even damage the ship. Swimming pools give the ship somewhere useful to put waste heat, cooling the engine and pleasing the passengers at the same time. It’s a win-win.

The same thinking applies to commercial refrigeration, brewing, food and beverage plant, plastic extrusion, and now especially to data centers: facilities like these also generate waste heat. Without somewhere to go, it ends up heating the roof of the building, then the air outside, which benefits no one.

Both a need and an opportunity for data centers

The latest generations of data centers use liquid cooling. Cold liquid, often water, is piped through the hot servers, absorbing heat before being piped away again.

Liquid cooling is common in other industries as well. And once upon a time, businesses would dispense the hot used coolant into the sewer, and pipe in fresh coolant to keep their processes cooled. But no longer. Today, regulations require businesses to recirculate coolant rather than continuously drawing and venting it. That means they need a way to quickly cool down used coolant, ready for recirculation. This requirement is the norm for new liquid-cooled data centers.

The value in heat recovery is clear. A facility generates unwanted heat in the course of its business; elsewhere, there is demand for heating and hot water. But despite the potential, McKinsey estimates that at least 3,100 thermal terawatt-hours of recoverable heat a year is still going to waste worldwide.

Technology is not the barrier

Waste heat recovery is not a new technology, or an especially complex one. All it takes is a heat exchanger, and often a heat pump. Using the same thermodynamic principle as liquid cooling, the heat exchanger transfers heat from where it’s not wanted into water or another agent, which is then piped to somewhere needing heating.

That could be somewhere in the same facility. Danish cooling compressor specialist Advansor offers combined heating and cooling systems for supermarkets, for example, which recover waste heat from the refrigeration and air conditioning systems and use it for comfort heating and hot water in the same building.

Or it could be in the local community, via a district heating network. This is where heat pumps come in. Waste heat tends to be at around 30-60°C. Older district heating systems operate at 90°C in the winter, and around 60°C in the summer. For those, heat recovery systems use a heat pump – a technology well known and widely used in heating, ventilation, and air conditioning – to lift the water temperature to a suitable level.

Naturally the higher the waste heat source temperature – which equates to how much energy is available – then the better the process efficiency, as measured by the heat pump’s coefficient of performance (COP).

Advancing technology may soon remove the need for even the relatively minor complexity of adding a heat pump. This is because the temperature of the coolant coming from the data centers is increasing due to liquid direct-to-chip cooling, while the latest generation of district heating systems work perfectly well at lower temperatures, so waste heat at 30-60°C can be directly used in those.

What about efficiency?

Any amount of recovered heat is a bonus when the alternative is expending energy to generate heat that just goes to waste.

But it still makes sense for heat recovery systems to be efficient. The point of the system is to reduce wasted energy; if the system uses inefficient motors or drives, it cannot fully realise its waste heat recovery potential.

The more efficient the variable speed drive (VSD) controlling a heat pump motor and the more efficient the motor itself, the more thermal energy the pump can provide for a given amount of electrical energy. A heat pump also needs a drive that doesn’t generate electrical harmonics which can impair power network performance and cause electrical problems.

Distance can be a challenge

In energy efficiency terms, heat recovery is clearly a positive for data centers. But there is still an upfront cost to install the system, which could take a while to pay for itself in saved heating costs.

And what if those savings are being passed on to a district heating network instead?

Often in these cases, the network offers to pay for the heat recovery system. Yet even when the system costs the data center nothing and solves a cooling problem, district heating networks still sometimes fail to convince data centers to donate their waste heat.

Sometimes it comes down to geography. Large operators generally aim to build their data centers in the lowest cost location possible. This often means building them far from the nearest district heating network connection. More distance between the data center and the heating network means longer pipes and more heat lost along the way. Above a certain distance, the connection is no longer worthwhile.

Data centers run 24/7: demand for heating is not constant

Any time a data center’s servers aren’t running, they’re losing the owner’s money. So data centers are always generating heat they need to get rid of.

On the other hand, district heating networks don’t always need heat. On hot summer days, people don’t want to heat their homes, even when they can do it for free.

Data centers need certainty, usually written into a contract, about how much heat their district heating network partner will take from their facility, and what will happen if at any point the network can’t or doesn’t want to take that much. Agreeing these contracts is the biggest barrier to increase waste heat recovery in this fast growing sector.

And even if it doesn’t directly benefit the data center, recovering waste heat is still a good idea. Data centers use a lot of energy. If even a percentage of that massive energy expenditure is going to waste, when the technology exists to recover and reuse it, data centers have a responsibility to cut that waste. European politicians have started to make that responsibility an obligation – but there is still so much more potential in this field.

Good neighbours

In the European Union, the amount of unrecovered waste heat across all industries rivals the total demand for heat and hot water in all residential and service sector buildings. Worldwide, if we recovered and reused all the heat that is currently going to waste, it could save as much as €140 billion.

And the demand, and the potential savings, are still on the rise. When electricity and gas prices can increase unexpectedly, free heat becomes more attractive, even when it calls for some up front investment. Heat pumps also become more economical as heating becomes more expensive.

For once, governments are moving faster than some businesses to recognize the opportunity. Several European governments have recently changed the law so businesses are no longer taxed for reusing waste heat. And when it’s used in district heating, waste heat is officially recognized in Europe as a clean heat source, a climate mitigation measure, and a green investment.

Today, district heating and cooling supplies 13% of the European Union’s demand. If data centers and other businesses take their governments’ hints and recover more of their waste heat, this could increase to 50% by 2050.

For some data center operators, this will mean stepping out of their comfort zone. But those who show leadership have everything to gain: more efficient operations, a more sustainable business, and a valuable role in the lives of their nearest neighbours.

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About the Author

Ulrik Vadstrup is the HVACR Segment Manager for Europe at ABB, bringing over 30 years of experience in industrial automation to the role. With a background spanning system design, software programming, and OEM and direct sales, Ulrik has developed deep expertise across the full project lifecycle, working with clients and partners worldwide.

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