ForTheDoers Blog

Data centres and district heating – a perfect match

Timo Piispa  |  17 May 2022, 12:03

In March, Fortum and Microsoft announced our joint plan for a ground-breaking data centre region in the Helsinki, Finland metropolitan area. The data centres will use 100% clean electricity and the waste heat they generate will be used to heat homes, as well as business and public premises in the area. I must say I am immensely proud of this project – but I believe it’s only the beginning.

home heating

We are standing at the intersection of two global megatrends: digitalisation and the energy transition. It is clear that the need to process and store data will only increase as more and more information is digitised. The demand for cloud services keeps growing and new data centres are built around the world at an increasing pace. At the same time, we continuously seek new solutions to replace fossil fuels across the energy system, as well as in other areas such as transportation. In achieving carbon neutrality in the energy system, the concept of circular economy is particularly attractive.

In the growing data centre industry, operators such as Microsoft are committed to using 100% renewable energy. This means that the energy is sustainably produced, however, without heat capture it is not necessarily used efficiently. A vast majority of data centres still release the waste heat generated by their servers into the atmosphere, where it dissipates.

The released heat does no harm in the atmosphere – we are talking about relatively small volumes of heat energy, not emissions. But it is still wasted, when instead it could be used for district (i.e. centralised) heating. Gas is still a prevalent source of heating energy across Europe, but it could be replaced in many places by a system similar to the one we have in the Espoo, Kirkkonummi and Kauniainen area. Waste heat distributed via a district heating system is much cheaper than developing and using geothermal heat, for example, and more flexible. Capturing and using the excess heat would improve the energy efficiency of the data centre while benefiting the whole society.

Location matters

The solution is extremely scalable. The project to circulate waste heat will provide heating for around 40 percent of the 250,000 residents in our district heating network. This is a major step to make our district heating system CO2 neutral. Smaller-scale versions are completely possible – we have already connected smaller centres to the network since they too need cooling. Bigger ones work just as well. The challenge is not size – it’s the location.

To transfer the excess heat to clients, one needs a district heating system with enough heat demand. While these are quite commonplace in the Nordics, they are much less so in continental Europe. However, this might change in the future as the transfer away from gas has become a more pressing issue due to the current geopolitical situation. New district heating systems are most likely to be built in growth areas with a sufficiently large customer base.

The data centre that provides the heat also needs to be close enough to the local community so that the heat can be transferred into the system. Data transfer and electricity grid connections must be taken into account too.

In Espoo, we started out by applying for building permissions and zoning that would serve the needs of both the data centre operator and Fortum. We have worked in close collaboration with the city of Espoo and the municipality of Kirkkonummi to create an environment that is optimal for this kind of joint project.

Naturally, the process did take some time and effort. However, if Europe wants to find alternatives for gas heating, new infrastructure will be needed in any case, no matter what solution is applied. The current electricity grid in Central Europe is not as robust as it needs to be considering the increased pressure caused by, for example, the electrification of transport. Investments must be made in both electricity and heating infrastructure if Europe is to keep up with its decarbonisation schedule.

Investment boost for renewables

Critics may argue that data centres consume vast amounts of electricity, adding to the rapidly growing demand. However, we cannot go back to the times when hospital records and tax reports were kept in paper files. Data centres are vital for today’s society to operate and develop – so let’s make the most of them by tapping into the side streams too instead of wasting them.

Also, all major data centre operators are committed to using clean energy, and by making power purchase agreements with new wind parks as they typically do, they are further boosting investment cycles and enabling more renewables. This type of modern industry is in fact promoting the energy transition – while, in this project and hopefully many others to come, creating circular economy opportunities for the energy sector. A win-win, don’t you think?

Timo Piispa

Timo Piispa

Head of Heating and Cooling Finland
timo [dot] piispa [at] fortum [dot] com

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