Could cities recycle the heat produced by data centres? Here's why that's very possible

As sir william rowan hamilton and other communities grip with how to handle data centre developments, concerns have been raised about the heat such facilities generate. 

The densely packed chips within the structures that store, process and distribute digital information produce a lot of heat. Depending on the way data centres are cooled, that heat could be released into the surrounding area.

However, a McMaster University professor says that if managed correctly, the heat generated by data centres, restaurants, power plants and other buildings could be a valuable resource.

James Cotton, who's with the department of mechanical engineering, said reusing waste heat — or energy harvesting — is "an excellent decarbonization strategy" and "something that you're going to see an awful lot of" in relation to data centres.

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At a May talk before parliamentarians and policymakers in Ottawa, Cotton said 70 per cent of the energy used by buildings in Canada goes toward space and water heating. Much of that heat, he said, is then wasted through exhaust. 

Energy harvesting would mean retaining that excess heat in liquid and then piping it to other locations where it could be used to warm water or spaces. 

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Cotton co-directs the McMaster Institute for Energy Studies and leads Harvest Systems Inc., a company spun out of his research at the Hamilton university. Harvest focuses on reusing heat produced by cooking appliances at restaurants.

With Hamilton city council working toward a pause on data centre development — in part due to community concerns about the rapidly growing sector —  the near-term future of two proposed data centres in Hamilton is uncertain.

However, proponents of both have said they're interested in recapturing heat generated by future data centres that would be used elsewhere in the community.

Slate Asset Management, an infrastructure and real estate investment company, has also said it is "exploring data centre uses" for a portion of a waterfront development called Steelport. On its website, Slate says Steelport is working with collaborators, including city-owned telecom and energy company HCE, to study the possibility of recapturing heat generated by data centres "offering a cheap source of decarbonized waste heat for Steelport tenants, and with the potential to provide waste heat back to the downtown core."

HCE completed a study in 2025 that found reusing heat from Bayfront industrial buildings "is both technically feasible and commercially viable." 

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If designed poorly, Cotton said in the Ottawa talk, data centres could create heat islands, raising nearby temperatures. However, he said, a better way is possible. 

Cotton said a massive data centre at Steelpot could be designed in a way to harvest waste heat for use in residential buildings throughout the industrial area and in Hamilton's downtown.

In an interview, Cotton said his team mapped 22 data centres globally, including in Markham, Ont., that are reusing heat. He noted a supercomputer in Waterloo, Ont., is also recycling heat. 

A March 2026 report by the MaRS Discovery District looked at recovering waste heat as one of several ways of mitigating emissions from data centres, and "reducing system‑wide heating demand and emissions."

The report recommends that policymakers establish requirements for data centre projects to mitigate energy use using technologies including waste heat recovery.

Critics of data centre developments in Hamilton have voiced concerns about whether companies will really make use of the best technologies available to green their operations. 

On June 24, Ward 3 Coun. Nrinder Nann — who moved the data centre moratorium motion — said pausing development will give time for municipal leaders to decide how they want data centre operators to do business. Sustainability and renewable energy should be baselines for new developments, she said.

Overall, Cotton said, energy harvesting has experienced slow adoption in Canada. In his Ottawa presentation, he said there are 217 thermal networks delivering heat as hot water, making up 2.2 per cent of the country's heating supply. Europe, he said, has over 6,000, serving over 100 million people.

Reporter

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