The UK government is allocating £90 million ($119 million) to develop and enhance heat networks that capture surplus energy from data centers and factories for residential and commercial heating.
According to the Department for Energy Security and Net Zero (DESNZ), over 750,000 households will benefit from reduced heating costs under this initiative. A central component is a “mega heat project” designed to distribute hot water via a tunnel beneath the River Thames.
Backed by £41 million ($54 million) in funding, the Thames project aims to provide “clean heat” to 650,000 London homes, reducing the capital’s reliance on natural gas—a strategy successfully employed in cities like Copenhagen, Amsterdam, Vienna, and Berlin for decades.
However, significant questions surround the project’s feasibility and timeline. The recently completed Thames “super sewer” took nine years and cost approximately £5 billion ($6.6 billion), prompting skepticism about whether the necessary tunnels will ever be constructed and what the final expenditure will be.
In the interim, the government plans to transport hot water 25 kilometers (15 miles) daily along the Thames using electric barges from a waste facility near Bexley. DESNZ officials stated that the £41 million covers only the barge component, which is expected to commence operations in 2028, while the tunnels are targeted for the 2030s. The cost of the tunnel portion remains undisclosed.
Experts also question the efficiency of utilizing datacenter waste heat. The Uptime Institute has previously noted that the temperature of this excess energy is typically insufficient for domestic heating without a heat pump, which consumes additional electricity.
A 2024 report by the trade association TechUK indicated that while fifth-generation heat network designs can accommodate the lower-temperature output of server farms, most UK systems currently operating are third-generation, resulting in lower energy efficiency and higher carbon intensity.
Despite these concerns, public opinion appears favorable. A survey by EnergiRaven found that roughly 60 percent of British citizens believe datacenter planning permissions should be contingent on supplying excess heat to local homes and businesses. Additionally, 62 percent expressed greater support for datacenter projects that commit to such heat-sharing initiatives.
EnergiRaven advocates for all new server farms exceeding 1 MW capacity to incorporate heat-sharing infrastructure. The firm argues that sharing waste heat could enhance operators’ community value, fostering greater public acceptance of new facilities.
Alan Howard of analyst group Omdia noted, “District heating is a clear benefit for any community, and for datacenters, it can cast a positive light at a time when some areas are hesitant to embrace them. Current information does not clarify whether the focus is on utilizing existing datacenters—which would present its own complexities—or encouraging new ones to support the heating proposal.”
Howard added, “Anything that reduces dependence on gas is advantageous. It is premature to call it a project; at this stage, it remains a concept. Nonetheless, the government’s commitment is impressive and crucial for enacting sweeping upgrades to what sounds like an aging and potentially inefficient existing system.”
Howard further cautioned, “Among the numerous risks for such an undertaking, a few stand out. As a government-led project, the actual progress and timeline could be protracted and complicated. The engineering for a massive effort—such as transporting hot water 25 km daily by electric barges, let alone tunneling under the Thames—will certainly face substantial challenges. While the funding sounds significant, real-world experience with complex construction projects easily shows costs ballooning far beyond initial estimates.”
The DESNZ investment will also support other heat network expansions, including an extension to an existing system in Solihull in England’s Midlands, a project at Marble Arch in London serving offices, homes, hotels, and businesses around Oxford Street, and another in London at Bexley and Greenwich, which could serve up to 100,000 homes when fully completed.
