Thermal energy networks could help data centers cool down their servers—and lower the temperature of the national discourse around them too.
There’s hardly a hotter topic today than data centers. In fact, they’re looking for ways to cool themselves down as running these facilities generates significant amounts of heat which can hurt their hardware. Across thousands of data centers nationwide, servers and computers consume huge amounts of electricity (176 billion kilowatt hours in 2023, according to the Congressional Research Service), and with some facilities growing to the size of a college campus, keeping cool is a huge task. As much as 40% of the total electricity use in a large data center goes to cooling it down.
In 2023, data centers consumed about 4.4% of the country’s electricity, and some projections have that number doubling or even tripling by 2028. This growth is putting a strain on the electricity grid, and consumers are feeling it. Imagine 16.7 million homes’ worth of electricity demand, which is about as many as are in the state of California; that’s how much total electricity data centers used in 2023.
This growth in demand from data centers, coupled with the need for grid modernization, has meant more spending by utility companies, which in turn has increased prices for consumers. From 2022 to 2024, residential electricity prices rose by 10%, even outpacing inflation in that same period, and are projected to keep rising. The average American household spent about $1,760 on electricity in 2023, and these increases have begun to sting pocketbooks and force hard choices.
This has led to significant public pushback. One study by Data Center Watch, a ‘research firm tracking the growing opposition to data center development,’ found that 20 projects worth an estimated $98 billion in potential investment were delayed or blocked by local opposition in the second quarter of 2025. According to the study, that’s more than all the delayed or blocked projects they’ve tracked in the preceding two years combined. Minnesota and South Dakota have had major projects suspended; the approval processes in Indiana and Georgia have changed in response to these objections; and Virginia, which holds 13% of the entire world’s data center capacity, had 42 groups campaigning for stricter regulations or bans on new centers by May of 2025.
On the one hand, we have companies operating data centers; spending significant money and energy to cool off their servers so that those servers can train AI models and process quadrillions of bits of information making up the internet. On the other hand, we have homeowners and community members living nearby, watching their electricity prices rise in large part because of this increased electricity demand from data centers, and taking action to slow or stop their construction.
This could be where thermal energy networks, or TENs, come in. TENs use a closed loop of pipes and pumps, where water can be moved underground back and forth between, for example, a large heat source like a data center and nearby houses which can use the heat in their homes. Installing this kind of geothermal heating and cooling system tackles the energy problem from two directions. First, a ground source heat pump like those used in TENs can reduce the energy needed to heat and cool a home by 25-50%, helping reduce costs to residents. Second, liquid is much more effective at cooling off computers than traditional air cooling, and these liquid cooling methods integrate well with TENs. By using liquid cooling technologies, data centers could save 15-20% of both energy costs and resulting GHG emissions, and using a closed-loop water system to send that heat to homes instead of evaporating it off as steam greatly reduces water consumption. These geothermal technologies can also help reduce the size of a data center, requiring less land for the same amount of processing power.
These technologies are new in the U.S. but are already being used around the world, especially in Europe. In Finland, the town of Mantsala heats the equivalent of 2,500 homes with a data center’s waste energy and has done so for most of a decade. And near Copenhagen, a metro data center will send its waste heat to keep 8,000 Danish homes warm starting in 2028.
There are, however, physical and financial limitations. For instance, because of the excess heat data centers produce, such a system works best in colder places, where people need to heat their homes more frequently than they need to cool them down. Therefore, using TENs in data centers might make the most sense in a colder state like Minnesota or South Dakota. Another key limitation is cost; while long-term savings are significant, building and connecting a thermal network is expensive. For example, connecting to the thermal network in Whisper Valley, Texas, one of the leading success stories for the technology, will raise a new home price by about $40,000. And in addition to the cost to the data center of installing the system, liquid cooling requires operators and maintenance workers to be prepared to deal with a complex plumbing system, specialized coolants, and heat exchangers. High interest rates further create a barrier to technologies like TENs with high up-front costs, despite their long-term potential savings.
From an economic and social perspective, some of this could be smoothed over by asking newly-constructed data centers to invest in local TENs, having them finance part or all the additional costs to upgrade nearby homes, libraries, or government offices with the needed heat pumps and connection piping. In exchange, the community buy-in to the project could streamline construction and reduce local opposition. While this could be expensive, potentially several million dollars per system, it seems less so when you consider that some data centers are pushing $100 million in capital expenditure.
This has an added economic benefit of tying the investment meant to alleviate the data center’s impact to the property that is most affected. Stated another way, rather than just writing a check to compensate residents for higher electricity prices, TENs would help reduce the electricity costs for residents through an investment in their homes. Then, if people want to move in or out of these homes, the benefit transfer is literally built into the house, avoiding a new batch of homeowners ‘coming to the nuisance’ and facing the downsides of higher electricity prices without the direct payment the previous owners received.
While thermal energy networks won’t single-handedly solve the problem of increasing electricity prices, and electricity demand is just one (important, but singular) piece of the puzzle in figuring out how best to incorporate data centers into our economy, they may be a helpful technology to cool down both data centers themselves and the national debates surrounding them.
- Climate Change and Sustainability