Data Centers & District Energy

Data centers are rapidly becoming one of the largest and fastest-growing energy users in North America, creating both unprecedented challenges and powerful opportunities for district energy systems. 

Synthesis Report - Data Centers & District Energy Northern Virginia Workshop

Workshop sponsored by IDEA, Ministry of Foreign Affairs of Denmark, Northern Virginia Regional Planning Commission, Ramboll

This data center & district energy workshop, hosted on December 10th at George Mason University, marked a material inflection point in the conversation in Northern Virginia on data centers and district energy. The discussion moved decisively beyond whether data center heat reuse is technically feasible where participants overwhelmingly agreed it is and instead focused on how to structure markets, partnerships, and projects capable of delivering near-term pilots and long-term scale.

Data Heat - Sector Coupling of Data Centers & District Heating Report

February 2026

Authored by Reshape Strategies

Sponsored by the Ministry of Foreign Affairs of Denmark, NYSERDA, and IDEA

Data centers are major electricity consumers, and nearly all the electricity they consume ultimately winds up rejected as waste heat. In years to come, the amount of electricity consumed by data centers will increase significantly. Not only will their waste heat volumes grow in magnitude, but the quality of that waste heat will also increase, as changes in data centre design and operations mean that data centers will reject higher temperature waste heat, making it more favorable for heat re-use in the district heating sector. At the same time, there will also be increasing demands placed on the electric grid from decarbonizing heating and transportation. This presents both a challenge and an opportunity.

• Challenge: How can the electric grid keep pace with the demands from data centers, as well as electrifying heating and transportation, while meeting climate targets, at the least cost while maintaining reliability?
• Opportunity: Re-using waste heat from data centers helps avoid using fossil fuels to heat buildings (helping meet climate targets), and can also reduce the burden on the electric grid (reducing costs and supporting reliability).

Read the full report

Data Center News

  • West Virginia Public Broadcasting Summary It looks like West Virginia is getting an early jump in the race to power the nation’s artificial intelligence data centers – and it’s happening in Mason County. Nscale , a London-based tech company that builds and operates the infrastructure needed for artificial intelligence development, is setting up shop on the 2,200 acre Monarch Compute Campus in Mason County. Under a new deal the company secured with Microsoft, Nscale plans to build and operate an advanced AI data center powered by a microgrid that will begin operation by late 2027. Continue Reading #News #DataCenter #Microgrids

  • Power Engineering Summary Caterpillar moved to the center of the AI infrastructure buildout this week as developer Nscale said it would use the company’s natural gas generator sets to power a major new West Virginia data center campus tied to Microsoft and NVIDIA. Monday’s announcement positions Caterpillar’s G3500 series reciprocating engine platform as core infrastructure for what Nscale said could become one of the country’s largest dedicated AI compute developments. Under the plan, Caterpillar equipment would support 2 GW of onsite generation by the first half of 2028 at the Monarch Compute Campus in Mason County, West Virginia, giving the project a faster path to power as grid access and transmission upgrades remain a constraint for large data center loads. Continue Reading #News #DataCenter #MemberNewsIDEA #Caterpillar

  • The Globe and Mail Summary Bell Canada is partnering with the Government of Saskatchewan to build a 300 MW AI-focused data centre in the Rural Municipality of Sherwood near Regina, in what it calls its largest-ever investment in the province and the largest purpose-built AI data centre project in Canada The project is expected to generate up to $12 billion in economic value for Saskatchewan over time, with at least 800 construction jobs, 80 permanent roles and potentially hundreds of additional community jobs, underscoring its role in regional growth and diversification. Tenants Cerebras and CoreWeave will provide high-performance AI compute based on wafer-scale systems and NVIDIA GPUs, while Bell commits to community partnerships, Indigenous procurement, academic collaboration and sustainable design features such as closed-loop cooling and potential district energy heat reuse. Continue Reading #News #District Energy #DataCenter

  • HSToday Summary There are 570 data centers in the state of Virginia, the majority of which are in the northern portion of the state often referred to as Data Center Alley. Virginia has the largest and most concentrated data center market in the world, with some estimates indicating that the region handles up to 70% of global internet traffic. Several qualities make the region a prime location for data centers: a supply of reliable and affordable energy, a strong fiber network, flat land for building footprints, water for cooling, location near major national customers, educated and skilled labor force, and a state tax regime that incentivizes the development of data centers. Another concern connected to data centers is energy waste. According to a report written by Reshape Strategies, “nearly all the electricity they consume ultimately winds up rejected as waste heat [into the atmosphere].” One suggested way to optimize energy use is to convey the wasted heat generated by data centers to heat for buildings through a district energy system (DES). 3 These systems capture “wasted” heat from one building and use it to heat another, reducing consumption needs. DES are advantageous because they ensure reliable, stable heating, reduce peak power demand and grid load, and increase efficiency via economies of scale by capturing otherwise wasted energy. xxv Recycling wasted heat through a DES could “increase energy efficiency, lower Green House Gas (GHG) emissions, ...

  • CNBC Summary Just outside Ireland’s capital, Dublin, a data center has become the first in Europe to turn to an independent, so-called “islanded,” microgrid to keep its servers running. Europe is looking to cash in on the AI boom while tackling power connection delays that have persisted for decades. The European Commission estimates the bloc needs at least 1.2 trillion euros ($1.39 trillion) in investments by 2040. In some cases, companies can’t wait for bottlenecks to be eased and are turning to their own sources of power. The Dublin facility, operated by digital infrastructure developer Pure Data Centre Group, which partnered with power supply solutions provider AVK, could mark the continent’s first step toward a privately powered ecosystem. AVK and Pure DC say their Dublin installation is the first data center in Europe to be operated by a live microgrid. “As these data centers get bigger and we see AI workloads and that data becoming more of a feature in our day-to-day lives, that only puts more stress on the grid. So we have to drive to a different solution,” AVK CEO Ben Pritchard told CNBC. Continue Reading #News #DataCenter #Microgrids

  • Edscoop Summary The University at Buffalo last week announced that its North Campus will reuse heat energy put off by a supercomputing center being developed with funding from the state government and philanthropists. According to press materials, the arrangement will “significantly” reduce carbon emissions. The supercomputing initiative, called Empire AI, is intended to promote general research and advance work that betters humanity. The energy project will include connecting the supercomputing center to a chilled water plant via 30-inch “neutral temperature” water pipes and a network of geothermal wells. According to the release, “this integrated system will allow heat generated by Empire AI’s high-performance computing infrastructure to be recovered and redistributed to campus buildings, reducing overall energy use and accelerating UB’s path to carbon neutrality.” Continue Reading #News #DataCenter #WastetoEnergy

  • The Conversation Summary The electricity needed to power new Pennsylvania data centers already in advanced stages of planning could power 11 million homes – nearly twice the total number of households in the state. Companies that want to build data centers to expand their cloud and artificial intelligence computing are drawn to Pennsylvania due to its proximity to major East Coast cities, relatively affordable land and electricity, and legacy industrial infrastructure. For instance, there is a plan to turn an abandoned steel mill in Pittsburgh into a high-density data center that can leverage the existing infrastructure for electricity and water supply. Pennsylvania also has potential for geothermal cooling from its abandoned mines across the state. An example is Iron Mountain’s underground data center in western Pennsylvania, about an hour north of Pittsburgh. The data center is located 220 feet below ground in a former limestone mine . The stable and naturally cool subterranean environment – around 52 degrees Fahrenheit (11 degrees Celsius) – and underground lake reduce reliance on conventional mechanical cooling. Beyond efficiency, reusing waste heat can transform how we think about data centers. In Idaho, a startup is using server waste heat to support hydroponic greenhouses for year-round food production . In Paris, excess data center heat has warmed swimming pools used during the 2024 Olympics, and one of Meta’s data centers ...

  • Blog Entry

    American Planning Association Summary The recent surge in artificial intelligence (AI) use has driven a similar increase in data center development. In most cases, data centers are resource drains that negatively impact neighboring communities. An average data center uses between four and five times the energy of a similar-sized office building, and its servers generate so much heat that they need year-round, constant cooling. This waste heat can become a valuable resource, however, when it is used instead of fossil fuels to heat nearby buildings. A growing number of projects in the U.S. and around the world are now using data centers as heat sources for nearby buildings. In a data center waste heat recovery system, heat from the data center is captured from the air or water used to cool its servers, either through a heat recovery chiller or heat exchangers, and sent to a nearby heat load (user of heat) through connecting infrastructure, such as a district energy system. In the U.S., such systems are usually found on institutional campuses and in the downtown districts of legacy cities. Continue Reading #News #DataCenter

  • Prince George Cititzen Summary A tech company is looking for the City of Prince George to endorse a project to build a technology and education campus in the region, according to a letter attached to the Monday, March 9 city council meeting agenda. CedarCore AI Inc. writes that it's proposed Prince George-area facility would include an artificial intelligence data centre component. The cold climate, CedarCore said, means that minimal water will have to be used to cool the equipment in the proposed facility. BC’s access to clean electricity also means that the centre should have a low carbon footprint. Also proposed is a heat exchange system to help heat the campus’ own buildings, greenhouses or district energy systems. Continue Reading #News #DistrictEnergy #DataCenter

  • Department of Energy; use of waste heat from data centers; findings and recommendations; work group; report. Directs the Department of Energy to lead efforts to accelerate the use of waste heat from data centers in the Commonwealth by making certain findings and recommendations and convening a work group to provide expertise, assistance, and feedback on the Department's efforts. The bill requires the Department to submit a report of its efforts, findings, legislative proposals, and recommendations no later than September 1, 2026. Continue Reading #News #DataCenter

  • ReImagine Appalachia Summary As the first in what hopefully will become a series of materials and events promoting responsible data center development, ReImagine Appalachia today released Catching Heat: The Opportunities and Challenges of Using Waste Heat from Appalachian AI Data Centers , a groundbreaking report examining how the region can turn a byproduct of the AI boom into a resource for heating industry, homes, schools, hospitals, and businesses. As AI‑driven data centers rapidly expand across Appalachia, they bring both costs and benefits. The question is whether we can find a way to maximize the benefits and minimize the costs with more responsible data center development. Large, around‑the‑clock electricity loads from data centers are likely to drive higher greenhouse gas emissions, local air pollution, and higher energy bills for residents, businesses, and other industries unless we engage in energy planning and support new clean energy development to help meet those needs. This report hones in on the waste heat generated by AI data centers. Capturing and reusing this heat through district heating systems, thermal energy networks, or nearby industrial processes can improve overall energy efficiency, lower heating costs, and reduce associated water use, greenhouse gas emissions, and local air pollution. AI data center waste heat reuse benefits local communities by lowering heating bills for homes, public buildings, and businesses when recovered heat is ...

  • Blog Entry

    Data Center Post Summary As the number of data centers grows, so do concerns about location, power access, and grid capacity, especially as AI and cloud computing drive surging electricity demand. Yet, data centers hold an unexpected solution: the waste heat they generate can be harnessed for community benefit. Captured through district energy systems, this heat can be transformed into a valuable community resource that provides low-carbon warmth, improves grid stability, and redefines data centers as energy partners. The Power Behind the Numbers In 2023, data centers accounted for roughly 4.4% of total U.S. electricity use, a share projected to rise to as much as 12% by 2028 . As utilities and developers scramble to expand clean generation and transmission, waste heat reuse offers an immediate, scalable way to reduce carbon intensity and ease grid stress. How Heat Reuse Works Servers generate heat, which can be captured and directed into district energy networks—insulated pipes transporting hot or chilled water—supplying heat to nearby buildings. This approach reduces the electricity needed for heating and cooling, improving overall efficiency and cutting emissions. In essence, the data center becomes part of a shared local energy ecosystem. Some add combined heat and power (CHP) systems that produce electricity and heat simultaneously. CHP can increase efficiency for large or urban centers. Two deployment models stand out: Urban data centers (10–20 ...

  • newswise Summary In response to the societal challenge of growing electricity demand from AI data centers, Oak Ridge National Laboratory (ORNL) is launching the Next Generation Data Centers Institute (NGDCI). This internal ORNL institute will unite the laboratory’s unique expertise and facilities that span energy technologies, high-performance computing, cybersecurity, and grid science to ensure that America’s rapidly growing AI infrastructure remains secure, efficient, and reliable. Data centers account for more than 4% of U.S. electricity use , and by 2030, that figure could climb as high as 17%, according to analysis by the Electric Power Research Institute . AI -specific workloads drive much of this growth: Training a single large language model can consume hundreds of megawatt-hours of electricity. The North American Electric Reliability Corporation warns that surging demand from AI and industrial electrification poses mounting risks to grid reliability. Continue Reading #News

  • Renewable Energy World Summary Data center demand is surging due to the growth of artificial intelligence (AI) and cloud computing, and developers are under pressure to find reliable, resilient, and cost-efficient power sources. Microgrids are rising to meet this challenge. These localized energy resources can operate independently of the main grid and help data center owners and operators to meet their power generation needs. But achieving optimal results from microgrids requires planning for the right mix and configuration of technologies such as renewables, storage, gensets, and thermal assets. The right mix and sizing of these energy generation and storage technologies is critical, and developers should also plan beyond simply powering their data centers. Cooling the infrastructure that runs these servers is equally critical and, based on past project performance, has proven to be a major factor in operational costs and energy use as well. Continue Reading #News #DataCenter #CHP

  • One Arabia Summary The UAE Ministry of Energy and Infrastructure, Khazna Data Centers, Agility and Phaidra are launching a pilot that uses artificial intelligence to cut energy use in data centers and district cooling systems across the UAE. The initiative supports the UAE Net Zero 2050 Strategy and national AI ambitions, targeting lower power consumption and stronger performance in large-scale digital infrastructure. Under that framework, the partners aim to extend AI-enabled optimisation beyond the initial pilot into wider UAE infrastructure, including district cooling operations. The Ministry intends to align any scaled deployments with the UAE Energy Efficiency Strategy, while reinforcing the country’s position as a regional and global location for AI-driven digital infrastructure investment. Continue Reading #News #DistrictCooling

  • Umea University Summary Umeå University and the energy company Umeå Energi are now developing a new AI‑based decision support system at the Dåva combined heat and power plant in Umeå. Combined heat and power plants form part of society’s critical infrastructure, where the requirements for reliability and robust operation are exceptionally high. Through this new collaboration, Umeå Energi aims to strengthen its preventive capabilities in day‑to‑day operations. “At its core, this is about gaining time. By detecting deviations early, we improve our ability to act, reduce unplanned shutdowns, and secure the availability and delivery of heat to residents in Umeå,” says Måns Kjellander, Project Manager at Umeå Energi . Continue Reading #News #CHP #DataCenter

  • Renewable Energy World Summary Data center demand is surging due to the growth of artificial intelligence (AI) and cloud computing, and developers are under pressure to find reliable, resilient, and cost-efficient power sources. Microgrids are rising to meet this challenge. These localized energy resources can operate independently of the main grid and help data center owners and operators to meet their power generation needs. But achieving optimal results from microgrids requires planning for the right mix and configuration of technologies such as renewables, storage, gensets, and thermal assets. The right mix and sizing of these energy generation and storage technologies is critical, and developers should also plan beyond simply powering their data centers. Cooling the infrastructure that runs these servers is equally critical and, based on past project performance, has proven to be a major factor in operational costs and energy use as well. Continue Reading #News #DataCenter #CHP

  • Inc. Summary One large data center typically consumes about 100 megawatts of power annually—enough to heat 100,000 homes for a year. Historically, that’s been a one-way transaction, with data centers drawing heavily from local power grids while communities get little in return. Now, some operators are changing that equation, repurposing waste heat to warm nearby buildings and power local infrastructure, perhaps even entire cities. “We’re at a turning point where data centers are evolving from consumers of resources to becoming a source of clean, affordable energy for local communities,” says Katie McGinty, vice president and chief sustainability and external relations officer at Johnson Controls, a global technology company that focuses on HVAC. Some cities in Europe, along with parts of the U.S., are utilizing a model known as district heating, which can heat or cool a cluster of facilities through a central plant. The main difference between district heating and an electrical grid is that grids move electricity whereas district heating moves thermal energy. Heat is made from either steam or hot water and is also called “waste” heat, a thermal energy byproduct derived from places like factories or data centers. The Mäntsälä data center in Finland, for instance, heats about 2,500 homes by harvesting the waste heat it generates, pushing energy costs down for locals. It depends on where the heat pump is located within a system, says Rob Thornton, the president ...

  • Entrevenue Summary In Finland, the heat generated by data centers (long considered mere energy waste) is now being harnessed to heat thousands of homes. Thanks to efficient heat pumps and well-developed district heating networks, this "waste heat" is recovered, reused, and fed into municipal systems. The country thus exemplifies a circular economy model applied to the digital sector. Finland's success rests on three key factors: A cold climate, generating a high demand for heating; a dense urban heating network (up to 50% of homes connected, compared to around 5% in France); largely decarbonized electricity production. Data centers are thus integrated into a coherent territorial energy system. In some cases, heat is supplied almost free of charge to local operators, allowing households to reduce their bills by 10 to 15%. Continue Reading #News #DistrictHeating #DataCenter

  • Long Island Business News Summary When it comes to AI infrastructure on Long Island, size matters. The type of data centers required to handle the staggering compute power demands of AI systems at the massive scale advocated by its most ardent proponents necessitate similarly massive electricity demand. While there are plenty of sites across the country with ample space and access to inexpensive electricity, experts say our region doesn’t quite fit the criteria. In order to promote resiliency, plans for data centers and their accompanying power generating facilities are designed to include measures meant to future-proof them against inevitable obsolescence and resource scarcity. “With the goal to use less water and in response to power demands and constraints, some developers are investigating heat recovery to insert into a district energy system where power and heat are produced and managed onsite,” says Pollicino. “Generation technologies such as the fuel cell power platform are being developed to be able to transition from natural gas to hydrogen if that becomes more available or can be created onsite.” Continue Reading #News #DataCenter #UnitedStates

  • Spectra Summary The state of Johor in Malaysia is a mostly flat, jungle-covered landmass that has long been a major producer of palm oil, rubber and crops including bananas. Today, attention is turning to a new kind of low-hanging fruit for the region — the soaring need for new data centers. Increasing the energy efficiency of facilities will play a big part, too, and here cooling is a crucial factor — especially as Southeast Asia’s tropical climate puts significant demands on these systems. Mitsubishi Heavy Industries (MHI) Group is one company with leading technology in this area. Its centrifugal chillers , which enable energy saving in air conditioning systems, are used in many countries in Asia Pacific, including in Malaysia and in a district cooling system in Marina Bay, Singapore . Continue Reading #News #MemberNewsIDEA #MitsubishiHeavyIndustries #DistrictCooling #DataCenter

  • Business Wire Summary Scale, a leading vertically integrated provider of advanced energy solutions, is pleased to announce the acquisition of Reload, a platform that sites, designs, and permits gigawatt-scale data center campuses paired with rapidly deployable on-site power infrastructure. “We’re excited to partner with Scale, whose operational expertise combined with access to EQT’s long-term, forward-thinking capital and industrial insight will help us achieve a truly differentiated platform,” said Reload CEO Mike Grunow. “Together, we’re building a fully integrated solution spanning gigawatt-scale campus development and capital-efficient energy center design and operations, ultimately advancing the energy industry’s ability to serve its most critical customers.” Continue Reading #News #CHP

  • Utility Dive Summary The PJM Interconnection on Monday asked federal regulators to approve changes to its retail behind-the-meter generation rules as part of an effort to facilitate colocating generating resources with data centers. In a move that affects combined heat and power , or cogeneration, facilities at industrial sites, PJM’s proposal would establish a 50-MW threshold for behind-the-meter facilities that would fall under the proposed requirements, set a three-year transition period for putting the threshold in place and grandfather entities with existing behind-the-meter contracts through the life of the contracts. Continue Reading #News #CHP

  • Power Summary Data centers release nearly all the electricity they consume as low-grade heat, representing a significant untapped energy potential. When harnessed with heat pumps, this heat can be upgraded for use in district and industrial heating applications. This concept is not theoretical. Successful, large-scale heat recovery systems are already implemented in Finland, Sweden, and Denmark. The 25-MW Nebius data center in Mäntsälä, Finland, recovers enough energy to heat the equivalent of 2,500 homes. In the U.S., where winters are milder, the potential is even greater—a single hyperscale facility could heat up to 20,000 homes. Successful domestic pilot projects include the National Laboratory of the Rockies’ campus in Golden, Colorado, and Amazon’s Seattle, Washington, headquarters. This solution also addresses the massive upcoming challenge of heating electrification. With an increasing number of jurisdictions mandating all-electric heating, utilities face yet another surge in electrical consumption. Water-source heat pumps in thermal networks offer higher efficiencies, more stable performance, and reduced winter peak demands compared to air-source and ground-source heat pumps. Waste-heat integration can help accelerate decarbonization while simultaneously creating a new revenue stream for utilities. Continue Reading #News #DataCenter #DistrictHeating #DistrictEnergy

  • Blog Entry

    Huawei Summary How will cities cope with the surging power demand due to data centers? Susanna Kass: The keys are to shift data centers from fossil-based power to clean energy, and to recover and re-use heat waste so that it becomes a resource, rather than a byproduct. Data centers run 24 hours a day, and their cooling systems continuously generate warm water that can be captured and pumped through underground pipes to serve nearby buildings such as offices, residences, or factories. This "district heating" approach is already well established in the Nordic countries. It serves about 40% of the roughly 100,000 homes in Espoo, Finland, a city near Helsinki. In Sweden, facilities south of Stockholm feed recovered heat waste into systems serving about 100,000 homes. These cities are turning heat waste from data servers into a primary energy source. Continue Reading #News #DataCenter #DistrictHeating