Data centre waste heat could warm millions of UK homes
Author: Joe Peck
New analysis from EnergiRaven, a UK provider of energy management software, and Viegand Maagøe, a Danish sustainability and ESG consultancy, suggests that waste heat from the next generation of UK data centres could be used to heat more than 3.5 million homes by 2035, provided the necessary heat network infrastructure is developed.
The research estimates that projected growth in data centres could generate enough recoverable heat to supply between 3.5 million and 6.3 million homes, depending on data centre design efficiency and other technical factors. The report argues that without investment in large-scale heat network infrastructure, much of this heat will be lost.
The study highlights a risk that the UK will expand data centre and AI infrastructure without making use of the waste heat produced, missing an opportunity to reduce household energy costs and improve energy resilience.
“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,” argues Simon Kerr, Head of Heat Networks at EnergiRaven. “Microsoft has said it wants its data centres to be ‘good neighbours’ – giving heat back to their communities should be an obvious first step.”
Regional opportunities and proximity to housing
The research points to examples where data centres are located close to both new housing developments and areas affected by fuel poverty. Around Greater Manchester, for example, 15,000 homes are planned in the Victoria North development, with a further 14,000 to 20,000 planned in Adlington. The area also includes more than a dozen existing data centres, with additional facilities planned.
According to the analysis, these sites could potentially supply heat to nearby new housing, reducing the need for individual gas boilers and supporting lower-carbon heating. Moreover, the study maps how similar patterns could be replicated across the UK, linking waste heat sources with residential demand through heat networks.
Using waste heat for space heating is common in parts of northern Europe, particularly in Nordic countries. There, waste heat from sources such as data centres, power plants, incinerators, and sewage treatment facilities is often connected to district heat networks, supplying homes via heat interface units instead of individual boilers.
In the UK, a number of cities have been designated as Heat Network Zones, where heat networks have been identified as a lower-cost, low-carbon heating option. From 2026, Ofgem will take over regulation of heat networks and new technical standards will be introduced through the Heat Network Technical Assurance Scheme, aimed at improving consumer and investor confidence.
Heat networks, regulation, and policy context
The Warm Homes Plan includes a target to double the proportion of heat demand met by heat networks in England to 7% by 2035, with longer-term ambitions for heat networks to supply around 20% of heat by 2050. The plan also includes funding support for heat network development.
However, Simon argues that current policy does not fully reflect the scale of opportunity from large waste heat sources, continuing, “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. 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.
“We know that investment in heat networks and thermal infrastructure consistently drives bills down over time and delivers reliable carbon savings, but these projects require long-term finance.
“Government-backed low-interest loans, pension fund investment, and institutions such as GB Energy all have a role to play in bridging this gap, as does proactivity from local governments, who can take vital first steps by joining forces to map out potential networks and start laying the groundwork with feasibility studies.”
Peter Maagøe Petersen, Director and Partner at Viegand Maagøe, adds, “We should see waste heat as a national opportunity. 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.
“As this data shows, the UK has all the pieces it needs to start taking advantage of waste heat – it just needs to join them together. 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.”
