Waste heat from data centres could heat millions of UK homes
The rapid expansion of UK data centres is creating an unexpected opportunity for businesses, local authorities and households. New analysis suggests surplus heat from data centres could be captured and used to heat millions of homes by 2035 if the right infrastructure is built.
For UK SMEs, this isn’t just an environmental story. It links directly to future energy costs, local planning decisions, grid capacity, and how commercial buildings fit into a changing heat system.
Right now, most of this heat is wasted. Servers are cooled to keep digital services running, and the resulting warm air or water is released into the environment. With investment in heat networks sometimes described as “heat highways” that excess heat could be moved to where it’s needed. The question is whether the UK moves fast enough to capture the value.
What’s happening
The UK data centre sector is expanding quickly. Demand for cloud computing, AI, streaming, financial services and digital storage continues to rise. Every new data centre brings a corresponding increase in energy use and heat output.
Recent analysis by UK energy management software provider EnergiRaven, working with Danish sustainability consultancy Viegand Maagøe, assessed how much usable heat UK data centres could generate if heat recovery systems were widely deployed.
Their modelling suggests that by 2035, recoverable waste heat could be enough to supply heating for around 3.5 to 6.3 million homes, depending on technology choices and how close data centres are to heat demand.
Why the range is so wide
Not all data centres are the same.
Older sites often use air-based cooling, which makes heat capture harder. Newer facilities increasingly use liquid cooling, which runs at higher temperatures and is much easier to connect to heat networks.
Location also matters. The closer a data centre is to housing, offices or public buildings, the more commercially viable heat recovery becomes.
What other countries are already doing
This approach is common in parts of northern Europe. In countries such as Denmark, Sweden and Finland, data centre waste heat is routinely fed into district heating networks alongside heat from power plants, waste-to-energy facilities and even sewage treatment works.
District heating networks distribute heat through insulated pipes to homes and businesses across towns and cities.
Where the UK is heading
In the UK, heat networks currently meet only a small share of total heat demand. The government’s Warm Homes Plan includes an ambition to expand heat networks so they provide around 7% of England’s heat demand by 2035, rising towards 20% by 2050.
To support this, the Green Heat Network Fund provides around £195 million per year to help local authorities and developers invest in low-carbon heat infrastructure. Eligible projects include networks that use data centre waste heat.
However, analysts involved in the research argue that policy and funding levels may not be sufficient on their own. Without faster roll-out of pipes, pumps and heat exchangers, much of the potential will continue to be vented into the air.
Why this matters for UK businesses
For SMEs, the implications go beyond climate targets. Heating remains one of the biggest energy costs for many organisations, especially those in older or energy-intensive buildings.
Energy cost and price stability
If heat networks expand as planned, businesses near new or existing networks could access more stable and potentially lower-cost heat over the long term.
Heat networks can have higher upfront infrastructure costs, but they may be less exposed to volatile gas prices once operational because they can draw on multiple heat sources.
Data centre heat is predictable
Data centre waste heat is commercially attractive because it is produced continuously day and night driven by digital demand rather than weather.
That makes it a reliable input for a heat network compared to some other low-carbon heat sources.
Planning and development implications
Data centres are often criticised for high electricity demand and local environmental impacts. Increasingly, planners and local authorities want evidence that new facilities deliver wider community benefits.
Being connected to a heat network, or designed to enable future heat recovery, can strengthen planning applications and reduce local opposition.
New opportunities for supply chains
This shift creates opportunities (and new complexity) for engineering firms, property developers, facilities managers and energy service companies.
It may also introduce new contractual and pricing models for businesses in premises connected to heat networks, which will need to be understood and managed.
Grid capacity and connection constraints
Electrifying heat via heat pumps is a central part of UK decarbonisation plans but it increases pressure on the electricity network.
Heat networks using waste heat can reduce peak electricity demand in certain areas, potentially easing grid constraints and helping avoid costly upgrades. This matters to businesses facing delays or limits on new electricity connections.
Reporting, tenders and compliance
Low-carbon heat sources can support progress against carbon reduction commitments whether voluntary targets or requirements set by customers, investors or public-sector contracts.
Heat networks are not a silver bullet, but they can play a valuable role within a wider net zero strategy.
Long-term risk and property decisions
Businesses making long-term property or infrastructure decisions should consider how heat is likely to be regulated and priced over the next 10–20 years.
Areas designated for heat network expansion may face different obligations or incentives in future. Understanding policy direction reduces the risk of stranded assets.
Key facts at a glance
UK data centre waste heat could supply heating for around 3.5 to 6.3 million homes by 2035
The variation depends on cooling technology, efficiency and proximity to heat demand
The UK aims for heat networks to meet around 7% of England’s heat demand by 2035, rising towards 20% by 2050
The Green Heat Network Fund provides approximately £195 million per year for low-carbon heat network projects
Nordic countries already integrate data centre waste heat into district heating at scale
Heat networks can reduce pressure on the electricity grid and support wider renewable integration
SBS insight
From our perspective at SBS, the waste heat potential is credible but delivery is the real challenge. Capturing heat isn’t technically complex, but it needs early planning, long-term investment, and cooperation across multiple parties.
For SMEs, the key point is not to assume this is someone else’s problem. Decisions being made now about data centre locations, local plans and energy infrastructure will shape heat options for decades. Businesses with fixed sites especially in urban or industrial areas should understand whether heat networks are planned locally.
Timing matters. Retrofitting heat recovery to existing data centres is possible, but it’s far cheaper and more effective to design for it from the outset. Policymakers may increasingly expect new developments to be “heat-ready”, even if connection does not happen immediately.
There’s also a commercial balance to strike. Heat networks require significant upfront capital and payback periods can be long. That’s why low-interest public finance, pension fund investment and anchor heat loads from public buildings are often critical. Without these, private investment may stall.
For businesses working on decarbonisation plans, waste heat and heat networks should be assessed alongside heat pumps, on-site renewables and efficiency improvements. There is rarely a single best answer.
The opportunity is real, but it won’t deliver itself. The next few years will determine whether the UK treats data centre heat as a strategic asset, or continues to let it go to waste.
Further reading
UK Government – Green Heat Network Fund
https://www.gov.uk/government/publications/green-heat-network-fund
Department for Energy Security and Net Zero – Heat networks policy
https://www.gov.uk/government/publications/heat-networks-delivery-unit-hndu
EnergiRaven – Data centre waste heat research
https://www.energiraven.com
The Guardian – UK energy and heat network coverage
https://www.theguardian.com/environment/energy
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