Shared and district heat reuse: Economics and contracts
What utilities pay for heat, and new rules forcing reuse
What this tab covers Economics and commercial structures: levelised cost of the recovered energy against the fuel it avoids, host-site risk, and service models such as heat-as-a-service.Utilities pay for recovered heat at roughly what it would cost them to make it another way; EU and German rules now require large data centres to offer it.
Levelised cost of heat or avoided cost
MixedStockholm Exergi pays data centres about EUR 190,000 per MW of delivered heat per year, based on the cost of producing that heat by other means. That equals about EUR 22 per MWh at full output all year (calculated). The utility finances the connection and data centres repay it monthly over 15 years, while the data centre funds its own heat pumps. In Islington, council tenants on the Bunhill network get a 10% discount on heating charges. Published levelised costs per MWh were not found for these schemes.613
Stockholm payment for heat about EUR 190,000 per MW per year6 Implied heat price about EUR 22/MWh at 8,760 h (calculated)6 Connection repayment monthly over 15 years6 Bunhill tenant discount 10% on heating charges13Host factory credit risk
MixedHyperscale operators (Meta, Microsoft) are strong credits, but a data hall can be refitted or moved. Municipal sewage plants are the safest hosts because they never close. Industrial symbiosis carries real host risk: if a refinery or power plant closes, the network loses its source, so networks keep several sources.578
Heat-as-a-service and ESCO models
FavourableThree models are visible. In Stockholm, Stockholm Exergi's Open District Heating buys heat from many data centres at a published price, and the seller owns the heat pumps. In Odense, Meta hands the heat to Fjernvarme Fyn, which runs the heat pump plant. In Finland, Fortum invested about EUR 225 million in heat pumps, electric boilers and storage at two Microsoft sites, so the utility carries the capex and sells heat to its 250,000 customers. Investors should look at who owns the heat pump and whether payment is per MWh delivered or take-or-pay.5614
Fortum heat investment about EUR 225 million (2026)14 Stockholm suppliers 20 (2022)6EU and national rules for data centre heat2341516
| Rule | Threshold | Requirement | Date |
|---|---|---|---|
| EU EED 2023/1791, Article 12 | 500 kW installed IT power | Publish energy performance data every year | By 15 May 2024, then annually |
| EU EED 2023/1791, Article 26(6) | Above 1 MW total rated energy input | Use waste heat or other recovery unless shown not technically or economically feasible; cost-benefit analysis for new or substantially refurbished sites | National transposition deadline 11 October 2025 (as reported); several states late |
| Germany, Energy Efficiency Act (EnEfG) | Data centres of 300 kW or more | Reused-energy share of 10% if commissioned from 1 July 2026, 15% from 1 July 2027, 20% from 1 July 2028; efficiency value of no more than 1.2. A June 2026 cabinet draft adds exemptions where a heat-network link is not viable | From 1 July 2026; amendment pending |
Sources
- The EU's Energy Efficiency Directive and its impact on datacenters Covington & Burling (law firm briefing), 2025
- Centros de datos: obligations under Directive (EU) 2023/1791, Articles 12 and 26 Spanish Ministry for the Ecological Transition (MITECO), 2025
- Data centres and waste heat: an overview of the legal requirements for waste heat utilisation (Germany) Bird & Bird, 2024
- Odense Data Center 2 Meta (Facebook Engineering), 2020
- Stockholm, Sweden: heat recovery from data centres (Covenant of Mayors case study) EU Covenant of Mayors, 2023
- Fortum and Microsoft announce world's largest collaboration to heat homes, services and businesses with sustainable waste heat from new data centre region Fortum, 2022
- Katri Vala heating and cooling plant Helen, 2025
- Bunhill Heat and Power Network brochure Islington Council, 2021
- Fortum has started heat production at two large data centre sites in Finland Fortum, 2026
- Kalundborg Symbiosis: six decades of a circular approach to production European Circular Economy Stakeholder Platform, 2024
- Data centre update: draft bill to amend the Energy Efficiency Act Gleiss Lutz, 2026