New research shows data centre waste heat could transform UK low carbon heating and energy resilience.
Rapid growth in UK data centres, driven by cloud computing and artificial intelligence, is creating an overlooked energy opportunity. New analysis from EnergiRaven and Danish consultancy Viegand Maagøe finds that waste heat from projected data centre expansion could supply enough low carbon heat for at least 3.5 million UK homes by 2035, and potentially up to 6.3 million, depending on efficiency and design.
Without coordinated infrastructure investment, however, this heat will be lost. The research warns that the UK risks repeating a familiar pattern: investing heavily in electricity generation and grid upgrades for digital infrastructure, while ignoring the parallel opportunity to decarbonise heat at scale.
What is data centre waste heat?
Data centres generate large volumes of heat as servers process and store data. Traditionally, this heat is removed and expelled into the atmosphere to keep equipment operating safely. In energy system terms, this represents a significant inefficiency.
Through heat networks, also known as district heating, waste heat can be captured, stored as hot water, and distributed to homes and buildings via heat interface units, replacing gas boilers. This approach is already well established across Nordic countries, where connecting major sources of waste heat to heat networks is often mandatory.
Heat highways and heat networks explained
The EnergiRaven analysis introduces the concept of “Heat Highways”: large-scale thermal infrastructure designed to move heat from major sources, such as data centres, into urban areas with high heat demand.
In the UK, many data centres are already located near planned new towns or existing heat poverty hotspots. The report highlights Greater Manchester as a clear example. Around 15,000 homes are planned in the Victoria North development, with a further 14,000 to 20,000 homes proposed in Adlington. At the same time, more than a dozen data centres already operate in the area, with four additional facilities planned. Together, these sites could supply heat to all of these new homes.
Missed opportunities for low cost home heating
According to EnergiRaven, failing to connect data centres to heat networks represents a missed opportunity to cut household energy bills and strengthen energy security.
“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,” said Simon Kerr, Head of Heat Networks at EnergiRaven.
Kerr also pointed to the role of technology companies themselves, adding: “Microsoft has said it wants its data centres to be ‘good neighbours’. Giving heat back to their communities should be an obvious first step.”
UK heat network policy and regulation
The UK has begun laying the foundations for wider heat network deployment. Many cities are now designated as Heat Network Zones, where heat networks are identified as the lowest-cost low carbon heating option. From 2026, Ofgem will regulate heat networks, while the Heat Network Technical Assurance Scheme (HNTAS) will introduce new technical standards aimed at improving consumer and investor confidence.
The government’s Warm Homes Plan sets a target to double the proportion of heat demand met by heat networks in England to 7 per cent, or 27TWh, by 2035. Heat networks are expected to supply around 20 per cent of UK heat by 2050. The plan also commits £195 million per year through the Green Heat Network Fund.
Why current policy may fall short
Despite these measures, EnergiRaven argues that current policy risks encouraging fragmented development.
“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,” Kerr said. “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.”
The research stresses that large-scale heat networks require long-term finance models. Government-backed low-interest loans, pension fund investment, and institutions such as GB Energy could all play a role, alongside proactive local authorities commissioning feasibility studies and coordinating across boundaries.
Waste heat, energy security and the electricity grid
Beyond home heating, waste heat recovery from data centres could support wider energy system resilience. Peter Maagøe Petersen, Director and Partner at Viegand Maagøe, described waste heat as a strategic national asset.
“We should see waste heat as a national opportunity,” he said. “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.”
Petersen also noted that the UK’s urban density gives it a structural advantage. “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.”
Data centre waste heat offers a scalable route to low carbon heating, but only coordinated heat network investment will prevent the UK from locking in long-term inefficiency.
Read next: Sixfold AI supercomputing power boost at Cambridge – Build in Digital
Are you a building professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.
