Data centres & waste heat: An overview of the legal requirements for waste heat utilisation

The waste heat potential should be utilised - ideally on the company's own premises, by feeding it into the local heating network or by using it to heat neighbouring buildings. Monitoring and improving energy efficiency not only involves bureaucratic effort, but above all the search for suitable customers. And this has not yet been so easy. 

We provide an overview of the key legal regulations, particularly for data centres and regarding the use of waste heat.

Legal basis

Germany passed the Energy Efficiency Act (EnEfG) at the end of November 2023. While this contains rather unspecific requirements for most companies, the implementation and monitoring of which requires further elaboration, specific requirements on energy efficiency and reused energy are set for data centres.

The Energy Efficiency Directive 2023/1791 is important at European level. This was last amended in September 2023. In addition, on 14.03.2024, the European Commission adopted a delegated regulation on the first phase of the establishment of a common Union assessment scheme for data centres (C(2024) 1639). This is still in the 2-month review phase at the Council of the European Union and the European Parliament.

Who is obliged?

Germany has the highest number of data centres in Europe and ranks third worldwide behind the USA and China. According to the BMWK, there are more than 3,000 data centres in Germany, 90 of which have a capacity of more than 50 MW (so-called "hyperscale" data centres).

However, not all data centres are subject to the obligations of the EnEfG, but only data centres with a non-redundant nominal connected load of 300 kW or more. According to the BMWK, this means that around 1,000 data centres in Germany are covered by the scope of the EnEfG and therefore also by the waste heat requirements.

Specifications for waste heat utilisation

The energy efficiency specifications for data centres are divided into specifications for energy consumption effectiveness and specifications for the proportion of reused energy. 

For data centres that go or went into operation before 01.07.2026, there is no requirement for the proportion of reused energy, i.e. no requirements for waste heat utilisation. 

Data centres that go into operation after 01.07.2026 must achieve an energy efficiency value of no more than 1.2 and meet the following requirements for waste heat utilisation (Section 11 (2) EnEfG): 

• Commissioning from 01.07.2026: 10%
• Commissioning from 01.07.2027: 15%
• Commissioning from 01.07.2028: 20%

The targets must be achieved on a permanent basis no later than two years after commissioning on an annual average (Section 11 (2) sentence 2 EnEfG).

The following exceptions and deadline extensions apply to the requirements for waste heat utilisation (Section 11 (3) sentence 1 EnEfG):

• The proportion of reused waste heat no longer meets the requirements after commissioning due to subsequent events and through no fault of the operator.
• An agreement on waste heat utilisation with a neighbouring municipality or a heating network operator with a concrete intention to fulfil the requirements for waste heat utilisation within ten years is available.
• The operator of the local heating network has not accepted an offer to use waste heat within six months, even though the data centre operator has the necessary infrastructure in place.

If a data centre operator submits an offer for waste heat utilisation to a heating network operator, the heating network operator must provide information about the capacities of the heating network (Section 11 (3) sentence 2 EnEfG).

In addition, the EnEfG also contains provisions on heat utilisation for other companies, which are also applicable to data centres unless more specific provisions apply (Section 16 (4) EnEfG). § Section 16 para. 1 sentence 1 EnEfG obliges companies to avoid the waste heat generated in accordance with the state of the art and to reduce the waste heat generated to the proportion of technically unavoidable waste heat, insofar as this is possible and reasonable. If waste heat cannot be avoided, as is the case with data centres, the waste heat generated must be reused by means of measures and technologies to save energy through waste heat recovery, insofar as this is possible and reasonable (Section 16 (2) sentence 1 EnEfG). This should also explicitly include potential utilisation of waste heat on the company premises and by external third parties (Section 16 (2) sentence 2 EnEfG). As data centre operators generally have little or no opportunity to use waste heat on their own premises, the use by external third parties plays an overriding role.

To obtain data on waste heat utilisation and to link supply and demand, the Federal Agency for Energy Efficiency has set up a waste heat platform. By 31 March of each year, data centre operators must also provide the following data for the previous calendar year (Section 17 (1), (2) EnEfG):

• Name of the company,
• Address of the location or locations where the waste heat is generated,
• the annual heat quantity and maximum thermal output,
• availability over time in the form of performance profiles over the course of the year,
• the available options for controlling temperature, pressure and feed,
• the average temperature level in degrees Celsius.

The first reporting deadline on 1 January 2024 (Section 20 (4) EnEfG) was suspended by the BMWK until 1 January 2025 due to the EnEfG, which had only recently come into force. This means that the data must be submitted for the first time on 1 January 2025 and then annually on 31 March.

Irrespective of the data transfer for the waste heat platform, Section 17 (1) EnEfG stipulates that companies are obliged to provide data on waste heat generated at the request of operators of heating networks or district heating supply companies and other potential heat-consuming companies.

Energy efficiency register

In addition to the waste heat platform, a central data centre register has been or will be introduced at both European and German level. These are used to assess the energy efficiency of data centres. Data centre operators must submit certain data for the purposes of this register. This data is listed in Exhibit 3 of the EnEfG and in the Delegated Regulation on the first phase of the establishment of a common Union assessment scheme for data centres (C(2024) 1639).

In Germany, the energy efficiency register for data centres (data centre register) was launched in April 2024. Operators of data centres with a non-redundant nominal connected load of 300 kW or higher must register and publish certain data on energy consumption and energy efficiency for the previous year by 31 March each year (Section 13 (1) EnEfG). This deadline has been changed for 2024. Operators of data centres with a redundant nominal connected load of 500 kW or higher must submit the data by 15.08.2024. For smaller data centres with a nominal connected load of between 300 kW and 500 kW, the deadline is 01.07.2025. The Federal Office for Energy Efficiency (BfEE) of the BAFA is responsible for maintaining and evaluating the register.

The European Data Centre Database will be introduced at European level. Here, operators must submit their data for the first time by 15 September 2024 and then annually by 15 May. However, only data centres with an electricity requirement for the installed information technology of at least 500 kW fall under the scope of application (Directive 2023/1791, Art. 12 (1)). However, in Germany, data transmission is carried out centrally by BAFA so that data centre operators do not have to enter their data twice.

Challenges in waste heat utilisation

While the efficiency targets for data centres are generally to be welcomed, the energy efficiency requirements and their feasibility are sometimes viewed critically in industry circles. Apart from the already high price of electricity in Germany, the location for new data centres must now also be chosen in such a way that suitable waste heat users are as close as possible.

This is because it is often problematic to find suitable waste heat consumers for existing data centres or the expansion of a data centre campus. While feeding into a suitable district heating network may be an option if it is available, this is not feasible locally everywhere or requires high levels of investment. Neighbours are also not always available locally.

Although it is basically a good idea not to release waste heat from data centres unused into the environment, but to use it for the local heating network, it remains to be seen how many operators will be able to comply with the requirements or will have to rely on the existing exceptions. The waste heat platform, albeit associated with administrative effort, should help to implement the requirements and find suitable customers.

If you have any questions about the energy efficiency or waste heat requirements or reporting obligations, please get in touch.