UK funds £90m of heat networks as zoning rules loom for data centers
Data centers are named only as one possible heat source. The bigger issue for operators is zoning rules that could oblige them to supply heat
- Bexley and Greenwich: £11.5m toward a network that could serve up to 100,000 homes
- Upgrades: £13.3m for 76 inefficient networks in England and Wales
- Bradford: £9.7m to extend an existing network to 255 homes, a hospital and seven schools and colleges
- Jobs: more than 2,000 across all projects, according to DESNZ
If operators are compelled to connect data centers to a heat network, the added engineering and planning conditions are likely to show up in colocation pricing. Customers renewing or signing colocation contracts should ask whether the site sits in a proposed zone, who carries heat-reuse costs and whether the contract lets the provider pass those costs through.
“And for those already using heat networks, we are upgrading inefficient systems to make sure people get the high-quality, low-cost, reliable heating they deserve.”Martin McCluskey, minister for local energy and jobs, DESNZ
The Department for Energy Security and Net Zero (DESNZ) announced £90m for new and upgraded heat networks on 23 September, saying more than 750,000 homes will benefit. Heat networks pipe hot water to several buildings from a central source, and the department gives excess heat from a data center or a factory as examples.
The largest award is £41m for a scheme to move heat along and under the River Thames, which the government says will supply 650,000 London homes and, subject to planning consent, support about £5bn of investment in the city’s local networks. It will start with electric barges carrying hot water 25km a day. The Register reported that the heat comes from a waste plant near Bexley, and that DESNZ told it the barge phase should start in 2028, with tunnels hoped for in the 2030s. The release does not name a data center as the heat source for any funded scheme.
The more direct lever for operators is heat network zoning. In its January 2026 response to the zoning consultation, the government said zone coordination bodies will survey recoverable heat sources, including data centers. Where no commercial deal is reached, they will be able to require a heat source to connect and supply heat if connection is viable. It said implementation regulations for England would be introduced in 2026.
Sources
- Department for Energy Security and Net Zero, “Families set to save money through new and upgraded heat networks”, press release, 23 September 2026. https://www.gov.uk/government/news/families-set-to-save-money-through-new-and-upgraded-heat-networks
- Department for Energy Security and Net Zero, “Heat network zoning: government response to 2023 consultation”, January 2026. https://assets.publishing.service.gov.uk/media/6970ad6dec1d126584b9ef20/heat-network-zoning-government-response-to-2023-consultation.pdf
- The Register, “UK wants more homes heated by waste heat from datacenters”, 25 September 2026. https://www.theregister.com/on-prem/2026/09/25/uk-wants-more-homes-heated-by-waste-heat-from-datacenters/5298827
