Why Waste Heat Recovery from Data Centers Matters

The Scale of the Opportunity

As data centers balloon in size—thanks to increasing appetite for cloud storage, AI models, and cat videos—the need for smarter, greener energy strategies is more urgent than ever. These facilities now account for around 3% of global electricity use and about 4% of total greenhouse gas emissions, making them both a challenge and an opportunity when it comes to energy efficiency and climate impact. One of the key features of data center operations is the huge amount of low-grade waste heat produced by servers, storage systems, and networking gear, most of which ends up being dumped into the environment. While this heat was once seen as a nuisance, it’s now gaining attention as a valuable resource that can be reused or even turned back into electricity.

Environmental and Economic Gains

Recovering and reusing this heat offers multiple benefits:

• Carbon reduction: Offsetting fossil-fueled heating in district energy systems or nearby buildings.
• Energy efficiency: Improving overall data center performance and reducing cooling loads.
• Revenue potential: Selling heat to municipal networks, greenhouses, or industrial users.
• Grid resilience: Supporting thermal storage and seasonal load shifting.

Waste heat recovery from hyperscale data centers can reduce carbon emissions by up to 30%, improve energy efficiency by 10–20%, generate revenue of $100,000+ per MW annually, and support seasonal thermal storage for grid flexibility

Combined Cooling: Arsames Energy’s Vision for Sustainable Data Centers

Heat pumps offer a game changing advantage for data center cooling in regions facing water scarcity. Unlike traditional evaporative cooling systems, which rely heavily on water to reject heat, heat pumps operate on closed loop refrigerant cycles, drastically reducing or even eliminating water consumption.

But...How do you power the heat pump? Arsames Energy has engineered an integrated Power–Heat Pump cycle for hyperscale data centers.

The organic Rankine cycle (ORC) has emerged as a promising technology for converting low-temperature waste heat (typically in the 50–80°C range) into usable electricity. The primary objective is to achieve a HP-ORC modular system that can sustain net-positive electricity generation from data-center waste heat while delivering peak-shaving and supplemental cooling. 

Arsames Case Study

Arsames' proposed system incorporates a heat pump (HP) cycle to elevate the quality of the waste heat stream before it is used in the ORC to generate electricity. This integration is uniquely suited to exploit data center waste heat streams at 40–50 °C (air) and 60–70 °C (water-based cooling). The integrated approach can enable the data center to power part of its cooling and, under favorable thermal and component-performance conditions, export net electricity. 

Arsames calculation highlights the merits of combined waste heat recovery at the typical rack temperature of 70 °C as

• Energy Efficiency: 6.5%
• Exergy Efficiency: 40%
• Net Present Cost (NPS): 430 $
• Net Recovered Power: 12 KW