Data centres are currently built based on electricity grid access instead of heat demand. Meanwhile, municipalities are still burning fossil fuels for heating. The solution for this systemic disconnect lies in electrifying district heating through data centre waste heat, heat pumps, and seasonal storage, argue QHeat’s Chief Technological Officer Rami Niemi and Chief Business Officer Vesa Valonen.
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“A mindset shift is necessary in data centre planning. Instead of focusing on industrial-scale centres located far from energy demand, smaller facilities should be deployed where heat is actually needed."
- Rami Niemi, CTO & Founder, QHeat
What if the global data centre boom could be turned into a local energy opportunity?
The fast expansion of data centres has raised valid concerns about energy consumption and meeting net-zero targets. However, untapped potential remains: small data centres providing baseload heat, waiting to be stored for future seasonal use.
“A mindset shift is necessary in data centre planning. Instead of focusing on industrial-scale centres located far from energy demand, smaller facilities should be deployed where heat is actually needed,” says QHeat’s CTO Rami Niemi.
Data centres are typically planned based on the price of electricity, grid access, and land availability – not heat production. In an electrifying energy system, however, heat is an asset, not a side effect. Planning isolated data centres without integrating them into district heating networks is short-sighted and, in the long run, inefficient.
As municipalities move away from combustion and prioritise low-emission heating, the electrification of district heating is a crucial development. The combination of data centre waste heat, electricity-driven heat pumps and geothermal wells with seasonal heat storage illustrates how a global trend can be turned into a hyper-local energy resource.
The most impactful energy decisions should be built on scenarios that are tried, tested, and proven reliable. QHeat’s recent simulation shows the impactful result of a 5 MW containerised data centre coupled with a geothermal seasonal storage, being modelled as part of a municipal energy system.
Take a municipality of roughly 15,000 residents that utilises district heating. A local 5 MW containerised data centre would produce roughly 75% (33,2 GWh) of the heat demand. During winter, excess heat from the data centre is fully utilised for the district heating network, while during summer, most of the heat goes unused as waste heat.
"From our perspective, this is industrial-scale circular economy."
-Rami Niemi, CTO & Founder, QHeat
By combining the data centre with 5 deep geothermal wells (1,5 km each) and heat pumps (with a COP of 3), this mismatch can be resolved: excess summer heat can be stored underground and reused during peak winter demand.
During summer months, when demand is low, waste heat is injected into a deep geothermal well and stored in the deep bedrock. In winter, the stored heat is extracted to provide the flexible component on top of the data centre baseload.
This solution provides a total energy coverage of around 95 per cent of the municipality’s yearly demand, with geothermal storage accounting for roughly 15 per cent of total heat production.
“When electricity is used to first crunch data, heat is generated at the same time. If that heat is then utilised in the energy system, it becomes fundamentally more efficient. From our perspective, this is industrial-scale circular economy,” Niemi says.
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"Once operational, data centres support a wide network of service providers, maintenance, and indirect employment."
-Rami Niemi, CTO & Founder, QHeat
While both large and small data centres are crucial to the electrification of heating, containerised and modular centres are particularly efficient. They can be deployed in small and medium-sized municipalities and located where heat demand already exists. A 5 MW data centre might appear modest in comparison to larger facilities, but it effectively functions as a small municipal heat plant.
“Containerised centres don’t require major grid reinforcements or overhaul. Bringing hyperscale data centres into urban areas, though, would require massive investments in the electricity transmission infrastructure,” says QHeat’s Chief Business Officer Vesa Valonen.
According to Fingrid, Finland’s transmission system operator, significant additional grid capacity is not expected to become available in cities until around 2030.
Niemi and Valonen agree that from a broader system perspective, future data centre investments should be evaluated based also on their potential role in the energy infrastructure. From this point of view, data centres would be active enablers of a new energy system, not just passive power consumers.
A data centre-based heat system would also bring societal benefits by generating employment and providing economic support for municipalities experiencing population decline, Valonen continues.
“Construction alone creates thousands of person-years of work. Once operational, data centres support a wide network of service providers, maintenance, and indirect employment,” he says.
CTA: It’s time to rethink how to electrify district heating. Get in touch to take the next steps.
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