Executive Summary

• London’s data centres account for 80% of the industry’s capacity, with over 1GW of sites currently in operation, and 2.4GW in the pipeline – we should be working to optimise London’s sites by using heat reuse.
• We should adopt a micro network approach, so even if a data centre hyperscaler can’t heat the entirety of London, it could heat the three office blocks next to it or the swimming pool down the road. This would minimise disruption to the general public’s daily life and be less of a headache to navigate.
• The UK is making progress in the heat recovery game and many European nations are taking proactive steps, but Scandinavian countries are trailblazing in this sector.

With the government recognising data centres as critical national infrastructure, backed by the AI opportunities outlined in the 2023 Energy Act, regulations and policies surrounding thermal waste management and heat reuse are currently limited; however, stricter policies will come into effect to ensure data centres are more efficient and reuse heat, and London should be the primary hotspot to optimise first.

London is one of the UK’s major data centre growth hubs

London accounts for around 80% of the UK’s data centre capacity, with over 1GW of sites in operation, and 2.4GW in the pipeline for the near future. Theoretically, this is a gold mine for potential heat recovery – up to 1.6TWh of heat annually. This is the equivalent of heating half a million homes, which would make a tremendous impact on families in this cost-of-living crisis. Honestly, it’s a no-brainer, win-win situation if heat reuse were prioritised in the UK’s major data centre growth hubs.

AI is making heat reuse easier

Modern technology and AI are making heat reuse easier to navigate than it used to be; the increase in AI workloads is increasing rack densities, temperatures are higher and advanced liquid cooling is deployed to manage temperatures.

It’s actually a benefit for heat reuse because there’s more heat available and it’s hotter than standard. For the heat to be useful, it usually has to go through a heat exchanger to increase the temperature.

Furthermore, liquid cooling systems are easier to integrate with the infrastructure and technology needed to capture heat.

Economic and financial viability

LHD, linear heat density, is the strongest predictor of financial viability; it measures how much energy (MWh) you can sell for every metre of pipe you lay. Inside the world of district heating, the most expensive bit of kit is the pipes, and linear heat density can predict if a project will give you the ROI you want. For example, if you need to lay 2km of pipe to connect a data centre to one small building, it’s unlikely that you’ll make your money back. However, if the DC is next to a dense housing estate or hospital, LHD will be high; once LHD exceeds 4MWh/m, it’s likely the project pays for itself.

Furthermore, for projects like this to be viable, you don’t need a massive city-wide grid for it to work, especially in a place like London. It would make sense to adopt a micro network approach, so even if a data centre hyperscaler can’t heat the entirety of London, it could heat the three office blocks next to it or the local leisure centre with a swimming pool. These lower scale projectss are faster to build, easier to fund and can prove the concept works without the headache of digging up miles of main roads. Imagine the road works on that!

Commercial risk and redundancy tend to be the deal-breaker

Data centres have low risk tolerance and must remain operational as close to 100% as possible, so they couldn’t rely on heat networks to capture the heat and take it away 24/7; they will be required to maintain their full cooling infrastructure even if waste heat offtake is implemented.

Since they can’t rely on heat networks for thermal management, heat reuse becomes an additional cost rather than a replacement for systems.

Optimising London with heat reuse and policy change

The UK government are tackling routes to support the opportunity by funding the Old Oak and Park Royal Development Corporation to utilise data centre waste heat for a new network in north-west London. The momentum must keep going to make a bigger impact around

Policy changes such as mandating a heat reuse plan to ensure developers have talked to local heat users before their building permit, as this is because, generally speaking, data centres treat heat as an afterthought rather than addressing it in the planning phase.

The UK is making progress in the heat recovery game and many European nations are taking proactive steps to formalise the integration between data centres and district heating networks. However, Scandinavian countries like Finland, Denmark, and Sweden are trailblazing this movement with data centres integrated into district heating networks.

London could, and should, be more proactive in changing legislation and ensuring developers are planning for heat rather than thinking about it as an afterthought. With things hotting up in the industry this year, we shall soon see the direction the industry goes in regarding heat management.