Finance

The UK to Invest £90 Million in Utilizing Excess Heat from Data Centers

9/25/2026, 04:51 PM • Evgenia Sliv

(edited: 09/25/2026)

The UK to Invest £90 Million in Utilizing Excess Heat from Data Centers

The UK government is investing £90 million ($119 million) in the construction and improvement of heat networks that will use excess heat generated by data centers and factories to heat homes and for other purposes. According to the Department for Energy Security and Net Zero (DESNZ), more than 750,000 homes will receive more affordable heating as part of this initiative. A key component of the program will be a 'mega heat project,' which includes distributing hot water through a tunnel under the River Thames. £41 million ($54 million) will be allocated for this endeavor, and according to the ministry, the project is expected to provide 'clean heat' to 650,000 homes in London. This should reduce the capital's dependence on gas – similar schemes are successfully operating in cities like Copenhagen, Amsterdam, Vienna, and Berlin. In 2023, The Register reported on a project that planned to connect 10,000 new homes in West London to nearby servers to use their excess energy for heating. Given the slow pace of project execution in the UK, the question arises as to when this will be realized. The recently completed 'super sewer' project on the Thames took 9 years and cost approximately £5 billion ($6.6 billion), raising doubts about the feasibility and cost of the heat project. In the absence of tunnels, hot water will initially be transported 25 kilometers (15 miles) daily along the Thames on electric barges from a waste processing plant in Bexley. This idea has already been mocked by social media users. A DESNZ spokesperson stated that the £41 million funding is only for the barges, and the system is expected to start operating in 2028. The tunnels are expected to be operational in the 2030s, but there is no information on the cost of this part of the project yet.

There is a question about the efficiency of using excess heat from data centers. Previously, the Sustainable Institute noted that the temperature is generally not high enough for use in domestic heating, and a heat pump, which consumes more energy, would be required. According to a 2024 report published by the trade association TechUK, new fifth-generation heat networks can operate at lower temperatures, but most systems in the UK are third-generation with low efficiency and high carbon intensity. Despite existing doubts, a survey showed that about 60% of Britons believe that obtaining permits for data center construction should depend on transferring their excess heat to local homes and businesses. 62% of respondents said they would be more supportive of a project in their area if it included such commitments. The survey was conducted by EnergiRaven, which suggests that all new server farms with a capacity of more than 1 MW should include infrastructure for heat transfer. Amid ongoing debates over server construction, using excess heat can help operators demonstrate their value to local communities and strengthen public support for new facilities.

Alan Howard from the analytical group Omdia commented: 'Heat networks – are definitely a win for any community, and for data centers, it can provide a positive impression as some communities struggle to accept them. At this stage, it is still unclear whether the focus will be on using existing data centers, which undoubtedly creates its own complexities, or providing support to new data centers to support the heating proposal.' Howard added: 'Of course, anything that can reduce dependence on gas is also a positive point. For now, it is more of a concept than a project. However, government commitments are important for implementing such large-scale changes and improvements to the existing, possibly outdated and inefficient system.'

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