In Stockholm, the heat pouring off the city's data centres is no longer wasted but piped into the district heating network, enough to warm around 30,000 apartments a year, which means the warmth thrown off by people streaming films and storing photos now quietly heats thousands of homes across the city.

Every server in a data centre is essentially a small heater. Whatever electricity you pump into the machine to power the processors, the memory, the storage drives, and the networking equipment is, on the physical laws that govern electrical systems, converted almost entirely into heat by the time it exits the far side of the operation.

A large modern data centre with a load of ten megawatts is throwing off roughly the same thermal output as would be required to heat twenty thousand modern apartments through a typical winter. What most data centre operators around the world do with that heat is dump it into the surrounding atmosphere via massive rooftop cooling systems, air handlers, and evaporative towers. The heat then dissipates into the sky. The apartments in the surrounding neighbourhood, meanwhile, are heated separately by gas boilers, oil furnaces, or grid electricity generated in some other facility that is producing yet another round of waste heat elsewhere.

Stockholm looked at this arrangement in the early 2010s and decided it was ridiculous.

How the Swedish system actually works

The city already had one enormous piece of infrastructure that most cities do not, which was a district heating network. According to the European Commission’s own case study on Stockholm’s heat recovery programme, published by the EU Covenant of Mayors office in October 2023, Stockholm’s district heating system began operating in the 1950s and has since grown to cover 3,000 kilometres of underground insulated piping running beneath the streets of the city. It’s connected to approximately ninety per cent of every building in Stockholm. Roughly ninety per cent of every Stockholm resident, whether they live in an apartment or a townhouse or a detached family home, heats their space through the same district network, which takes hot water from a central production system, circulates it through radiators in their walls, and returns the cooled water to be reheated and sent back around again. The system is old, well-understood, and extraordinarily efficient at what it does.

In 2014, Stockholm Exergi, the joint venture that operates the network (fifty per cent owned by the City of Stockholm and fifty per cent by an investment consortium called Anchiale), launched an initiative called Open District Heating. The idea was simple. Instead of Stockholm Exergi generating all of the heat itself at its own central production plants, the network would become a two-way market. Any industrial or commercial operation in Stockholm that produced significant amounts of excess heat as a byproduct of its normal activities could sell that heat into the network at market rates. Stockholm Exergi would pay the supplier per megawatt-hour delivered. The heat would then be distributed to the same radiators in the same apartments the network had been heating all along.

Data centres turned out to be almost perfectly suited to the arrangement. They are always on. They produce heat at a constant, predictable rate twenty-four hours a day, seven days a week, three hundred and sixty-five days a year. Their location within the city is flexible enough that they can be sited within reach of the existing heating pipe network. And the heat they produce, once it has been captured by an on-site heat pump and boosted to the temperature the district system requires, is a genuinely useful thermal product rather than a waste stream.

Why other cities can’t easily copy the model

According to a 2017 industry article for Data Center Dynamics by Erik Rylander, then the Head of Stockholm Data Parks and Open District Heating at Fortum Värme, now the Commercial Director at Stockholm Exergi, three specific conditions have to be met for the Stockholm model to work anywhere else. The first is that the city needs to already have a functioning district heating network. Retrofitting one from scratch is prohibitively expensive and takes decades. The second is that the city needs a genuine winter, meaning cold enough for long enough that the heat market actually exists year-round rather than only for a few months. Warm-climate cities simply don’t need the amount of heat that a data centre produces. The third is that the network needs to be large enough to absorb heat from data centres of any size. Stockholm’s network handles roughly twelve terawatt-hours of heat per year, which is enough to accommodate the equivalent of nearly a hundred and fifty ten-megawatt data centres feeding into it without saturating the demand.

Roughly thirty data centres in Stockholm are now connected to the district heating network. By 2022, according to the European Commission case study, twenty of them were operating under formal Open District Heating supplier contracts, and the combined heat recovery from that portfolio was sufficient to warm roughly thirty thousand modern apartments annually. Individual data centre operators involved in the network include Bahnhof, EcoDataCenter, Digital Realty, Global Connect, and the Norwegian company DigiPlex, whose Stockholm facility alone was reported to heat approximately ten thousand households through the arrangement. For the data centres, the economics work in a way that would have been unthinkable a generation ago. They now generate a revenue stream of roughly two million Swedish kronor per megawatt of heat delivered per year, converting what used to be a pure cost centre (the cooling required to dump their waste heat somewhere) into an actual line of positive income on their operational accounts.

Stockholm Exergi’s stated goal is that by 2030, ten per cent of the city’s total heating needs will be met by recovered heat from data centres alone, with the remainder coming from other renewable and recovered sources such as biomass, waste incineration, wastewater heat pumps, and industrial byproduct heat. The wastewater heat pump plant at Hammarbyverket, which is the largest such facility in the world, already provides thermal output equivalent to the heating needs of ninety-five thousand two-room apartments per winter. Between wastewater, industry, data centres, and biomass, Stockholm Exergi expects the entire district heating supply to be fully renewable or recovered by 2030, with no fossil fuel inputs at all.

Which is a strange kind of outcome for a technology sector that most environmental discussions still treat as an unmitigated source of climate pressure. The data centres in Stockholm are, on the current accounting, warming the apartments the same city’s residents live in. The photos being stored in their servers are the same photos being viewed by the same people whose radiators are running on the heat those servers throw off. Every stream, every backup, every uploaded video is a small contribution to the ambient temperature of somebody’s living room across town. Nothing about the arrangement is theoretical. It has been running at scale for more than a decade. It heats real houses that real Swedes live in. And it turns what almost every other city on Earth is currently treating as an environmental problem into a useful piece of urban infrastructure.