Policies to Accelerate Data Center Heat Reuse: Achieving Economic and Climate Change Goals, Revision 1.0

Overview

The document starts from the observation that data centres run year-round like large heat pumps and turn practically all the electricity they use into heat. The heat can be sold to end users with a zero carbon footprint, and its price depends on the end user's infrastructure savings and on the data centre's avoided cooling operating costs. Candidate users are space and district heating, pharmaceuticals, food and beverage, commercial cooling (hospital campuses, laboratories and large buildings, described as most compatible with data centres of 1 to 10 MW), bio-ethanol, water treatment and general hot-water preheating; in the hotel industry water heating makes up almost a third of energy use.

Barriers fall under four headings: lack of knowledge of the technology and opportunity, lack of proximity and connections between data centres and heat users (planning and zoning usually run separately), project development risks and costs (energy companies often want commitments of 10 years or more, longer than some data centre owners' financial horizon) and a lack of national and sub-national policy. Local climate means heat demand is not constant year-round, so using 100% of recaptured heat at all times is hard. Germany requires proximity of off-takers to be considered in data centre site selection.

Policy examples fall into three groups. Requirements and recommendations: the EU Energy Efficiency Directive (EED; the revision in force from October 2023 requires exportable excess heat to be reported from 2024 and has Member States encourage centres with 1 MW or more installed IT demand to apply the European Code of Conduct best practices), the EU Taxonomy, Germany's EnEfG (2023), Greater Amsterdam, Norway recommending assessment above 2 MW since 2021, the US and Singapore's SS 564. Information and matching: the EU Heat and Cold Matching Platform, Bytes2Heat, Ireland's Heat Atlas and the Norwegian heat map. Incentives: Washington State industrial symbiosis grants, Germany's three-billion-euro district heating fund, France's fonds chaleur, Quebec grants, Denmark's tax repeal and the UK's 65 million pound funding.

The appendix details selected policies. For EnEfG the draft provisions are PUE of 1.3 within 2 years for data centres operating on or after 1 July 2026, and a reused-energy share of at least 10%, 15% for starts from 1 July 2027 and a planned 20% from 1 July 2028. Washington grants require one-to-one non-state matching and are capped at USD 500,000 each. The document is a compilation rather than a legal source, states that policies may change and does not claim to be comprehensive.

Key points

1. Heat users with year-round cooling demand such as hospital campuses, laboratories and large buildings are described as most compatible with data centres of roughly 1 to 10 MW.
2. Main barriers: lack of knowledge, lack of proximity and connections, project risk and cost (energy companies want commitments of 10 years or more), and a policy gap.
3. The revised EU EED took effect in October 2023; exportable excess heat must be reported from 2024; centres with 1 MW or more installed IT demand are encouraged to apply European Code of Conduct best practices.
4. The EU Taxonomy requires data centres to follow Code of Conduct expected practices with third-party verification for a substantial contribution to climate change mitigation.
5. Germany's EnEfG (2023) places heat-reuse and efficiency duties on data centres and on businesses using more than 15 GWh per year.
6. EnEfG as summarised: PUE 1.3 within 2 years for centres operating from 1 July 2026; reused-energy share at least 10% (1 July 2026), 15% (1 July 2027) and a planned 20% (1 July 2028).
7. Since 2021 Norway recommends heat reuse assessment for data centres above 2 MW.
8. Washington State industrial symbiosis grants require one-to-one non-state matching and are capped at USD 500,000 each.
9. Incentive examples: Germany's three-billion-euro district heating fund through 2026, the UK's 65 million pounds for five projects, US DOE COOLERCHIPS with 40 million dollars for 15 projects.

Using it in design

• Add a jurisdiction-aware compliance check: for German sites flag PUE 1.3 and the 10/15/20% energy-reuse targets by commissioning date.
• For EU sites of 1 MW IT or more, require EED reporting fields including exportable waste heat.
• Expose ERF and ERE as first-class metrics in the energy model so heat-reuse designs can be scored against these thresholds.
• Treat proximity to a heat host as a site-selection criterion for heat-reuse sites; in Germany it is expected to be considered in siting.
• Treat the policy summary as secondary and link users to primary legal texts for final verification.
• Show the mismatch between heat-host contracts of 10 years or more and the shorter financial horizon of data centre owners as a project risk.

Who should read it

Data centre owners and operators, sustainability and public affairs managers, prospective heat users and policy makers.

Document contents

1. Executive Summary
2. Introduction
3. The Opportunity
4. Key Challenges
5. Governments Can Adopt Helpful Policies
6. Data Center Heat Reuse Requirements and Recommendations
7. Analyzing Data Center Heat, Gathering/Sharing Information, and Promoting Collaboration
8. Incentives for Data Center Heat Reuse
9. Engagement
10. Conclusion
11. Appendix - Detailed Information on Policies
12. EU's Energy Efficiency Directive (EED)
13. Washington State Industrial Symbiosis Grant Program
14. German Energy Efficiency Act (EnEfG-E)
15. Greater Amsterdam Region Policies (The Netherlands)
16. Appendix: References

Related standards

• EU Energy Efficiency Directive (EU) 2023/1791
• German Energy Efficiency Act (EnEfG) 2023
• EU Code of Conduct on Data Centre Energy Efficiency
• Singapore SS 564

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Publication details

Authors

Open Compute Project Foundation

Publisher

Open Compute Project Foundation

Year

2024

Document number

Rev 1.0

Document language

English

Source type

Industry body

Access

Open licence — downloadable

Licence

CC BY-SA 4.0 — share with attribution under the same licence

Licence evidence

www.opencompute.org

Citation