In the depths of Helsinki’s underground, fifty meters below a city known for three million saunas and a culture built around warmth, a different kind of heat is now circulating. It hums through concrete tunnels lined with steel pipes and industrial pumps, forming a quiet system that connects some of the world’s most advanced data centres to the radiators of ordinary homes. The innovation is simple in concept and ambitious in practice. It turns the digital world’s waste into a profitable public service.
Inside the Helen heat pump station, the sound is steady and mechanical. What flows through the pipes above the concrete floor is the byproduct of our digital habits. Every video stream, every AI query, and every cloud service produces heat inside the servers that power the modern internet. For most countries, this heat is an expensive problem. In Helsinki, it has become an economic opportunity.
Olli Sirkka, the chief executive of Helen, points to the partnership model that has made the system work. His statement captures the economic logic in a single sentence. “They have a problem with heat. Our job is to sell heat. We can monetize their problem.”
The simplicity of that idea hides a complex technical and financial structure behind it. But in a world where data centers consume increasing levels of electricity, and where cities struggle to decarbonize heating, the Helsinki model offers a rare alignment of demand, supply, climate and profit.
A Global Energy Problem Takes Shape
The scale of the challenge is enormous. Analysts project that by 2035 the world’s data centres will consume about four point four percent of global electricity. To put that into perspective, if all global data centres formed a country, they would rank fourth in electricity use. Only China, the United States and India would consume more. Cooling these data centres already accounts for nearly one third of their total energy demand.
The growing appetite for artificial intelligence is adding new pressure. In parts of the United States, electricity prices in regions with intense data centre growth have risen by more than two hundred percent compared with five years ago. The problem is not only the quantity of energy required but the strain placed on grids that were not designed for this sudden surge.
Helsinki, however, treats that energy not as a cost but as a resource.
How Helsinki Turns Digital Exhaust Into Public Utility
The process begins inside the data centres operated by companies such as Equinix, Telia and Microsoft. The servers convert almost all the electricity they consume into heat. Instead of venting that heat outside, the facilities feed it into Helen’s system through heat exchangers. Large industrial heat pumps raise the temperature to the level required for the city’s district heating network. The warmed water then circulates to homes and businesses across the city. The system sends cooled water back to the data centres to absorb more heat, creating a continuous loop.
Finland is particularly suited to this model. The country maintains one of the most advanced district heating networks in the world. More than ninety percent of Helsinki’s buildings are connected to it. The climate ensures constant heating demand for much of the year. The urban density reduces the cost of pipeline infrastructure. And Finnish energy companies are deeply familiar with municipal scale thermal systems.
This combination allows data centre heat to function like a base load heating supply. It is steady, predictable and inexpensive compared with alternatives.
The Economics Behind the Model
The financial structure is as important as the engineering. In most arrangements, Helen invests in the heat pumps and the integration equipment. A single large industrial heat pump installation can cost between thirty million and seventy million euros depending on capacity and site complexity. Helen covers this capital expenditure. Data centre operators therefore avoid large cooling costs and equipment investments that could reach similar levels for a one hundred megawatt facility.
For Helen, the investment is profitable. The utility pays nothing for the heat, which arrives as a free byproduct. It sells the upgraded heat into the district network where prices remain below the European Union average. Because the cost of acquiring the heat is essentially zero, Helen’s margins on recovered heat are significantly higher than its margins on conventional heat sources.
The effect shows up in consumer prices. Helen has reduced heating prices twice in two years while increasing its profits. Each new data centre integration strengthens this trend. The latest project with Equinix is expected to heat about one thousand five hundred homes. Financially, such a project can generate several million euros in net annual revenue for the utility, depending on seasonal demand and electricity prices for heat pump operation.
For the global cloud companies, money is not the primary incentive. Microsoft, for example, earns little from the heat itself. However, the financial savings from avoiding cooling infrastructure, the tax advantages that operators like Telia report, and the sustainability benefits all contribute to a favourable business case. The largest project under construction, Microsoft’s partnership with Fortum, is expected to provide heat to roughly two hundred fifty thousand homes. A project of that scale represents billions of euros in avoided fossil fuel imports over its lifetime and hundreds of millions in infrastructure value for the local district heating system.
The Competitive Landscape and the AI Energy Race
Across the tech industry, energy efficiency is becoming a competitive currency. Equinix operates more than two hundred seventy data centres worldwide. The company reports that managing heat is one of the largest operational costs. In the era of artificial intelligence, where demand for compute capacity is rising sharply, energy management has become central to profitability and public pressure.
Data centre operators are under scrutiny. Analysts warn that in the rush to build for AI, some companies may cut corners on sustainability and long term planning. Industry leaders acknowledge that mistakes do occur and that not every region offers the conditions required for heat reuse. However, the Nordic region shows what is possible when infrastructure and incentives align.
Can the Helsinki Model Be Exported
The question facing policymakers and utilities worldwide is whether this model can scale. Experts argue that the answer is yes, but only in specific regions. Northern Europe, parts of Central Europe and northern North America have the climate and the building density required. The limiting factor is not the technology, since heat pumps are proven and widely available. The real challenge is the lack of district heating networks in many cities. Building such networks from scratch can require billions of euros and decades of planning.
In places like Dubai or much of Africa, where cooling demand dominates, waste heat has little economic use. In these climates, the Helsinki system cannot easily be applied.
Nevertheless, interest is growing. Almost one hundred data centre operators are in discussions with Helen about future integration. Other European countries have begun drafting regulations that encourage or even require data centre heat reuse where feasible. The European Union has proposed efficiency and waste heat standards that could push the industry in this direction.
The Macro Implications: Waste Heat as a New Energy Asset
The Helsinki experiment illustrates a broader economic possibility. Waste heat, traditionally seen as an unavoidable loss, can become a valuable energy asset. If integrated early into urban planning, data centres could subsidize district heating, improve energy independence and reduce reliance on imported gas.
The financial value is significant. In Northern Europe, district heating markets represent tens of billions of euros annually. If even a small percentage of this heat were supplied by data centres, utilities could save substantial fuel costs. Meanwhile, cloud operators could position themselves as contributors to national decarbonisation strategies rather than burdens on public power grids.
The potential carbon reductions are also notable. Every year, a large heat recovery system can offset tens of thousands of tonnes of carbon emissions by replacing fossil heating. At national scale, this becomes a strategic asset in climate policy.
A Future Shaped by Efficiency
In the race to build the digital infrastructure of the AI era, the measure of progress is no longer speed or size alone. It is efficiency. The cities and companies that integrate energy and data infrastructure most intelligently will shape the long term economics of technology.
Helsinki’s underground tunnels offer a glimpse of what this future can look like. While the heat pumps continue their steady work beneath the city, the homes above stay warm from a source no one imagined a decade ago. It is a rare solution that aligns profit, climate and public benefit. And it suggests that in the age of artificial intelligence, the most transformative innovations may be found not in algorithms, but in the overlooked byproducts of the systems we build.
