Germany eases data-center heat rules as AI demand grows

From obligation to assessment

Germany’s Energy Efficiency Act, passed in 2023 by the previous government, required new data centers to reuse part of the heat generated by their equipment, where possible feeding it into municipal heating systems.

Patrick Graichen, then a senior official at Germany’s Ministry for Economic Affairs and Energy, called that an obvious solution. He resigned after accusations of cronyism.

“We need clean heat, and data centers are a source of it,” Graichen told WIRED.

In June, a month before the rules were due to take effect, the federal government eased them. Under amendments expected to be submitted to parliament for approval, operators will no longer have to reuse waste heat. They will have to assess whether doing so is feasible, and can opt out if it is not.

Economy and Energy Minister Katherina Reiche said the amendments would create practical rules for data centers and support digital sovereignty and economic growth. Germany’s Ministry for Economic Affairs and Energy did not respond to a request for comment.

The case against the original law

Developers argued that the original requirement could leave them responsible for reusing heat even when there was nowhere to send it, such as a municipal heating network or greenhouse. Barbara Smitten, deputy director of critical systems at consultancy Cundall, said some requirements depended on circumstances beyond companies’ control while the responsibility remained theirs.

Several German data-center projects have fallen through over the past 18 months. Stack Infrastructure abandoned a $3 billion project in Hesse, and state-owned Komm.ONE withdrew from a project in Baden-Württemberg. The precise reasons for project cancellations are often hard to establish, but Komm.ONE explicitly cited the Energy Efficiency Act’s burdensome requirements.

The rule change could release delayed demand. Germany’s central position makes it easier to transmit data to Western and Eastern Europe, and Smitten said easing the rules reduces the risk that investors will see the German market as unattractive.

But the dispute is not only about whether heat can be reused. John Booth, managing director of consultancy Carbon3IT, who helped develop Europe-wide data-center energy-efficiency targets, said there are no technical barriers when a heat customer exists: the technology and solutions are established, and adoption depends on the organization’s willingness.

Graichen’s position is that finding a heat customer should be a standard part of choosing a site. He has urged developers to stop complaining. The government’s amendments instead make reuse an option to assess, not a condition of building.

The next constraint may be public consent

I think the change addresses a real planning problem, but it does not resolve the political one. A rule that forces operators to reuse heat without a viable recipient can make projects harder to build; removing that obligation can make them harder to defend.

In February, the council of a small German town voted against a $2.5 billion project, partly over climate concerns. Across Europe, governments are trying to grow an energy-intensive AI sector, reduce dependence on the United States and meet climate commitments at the same time. Protests by climate activists could slow construction, as they have contributed to permitting freezes and construction moratoriums in the United States.

Graichen says attitudes toward data centers have changed completely over the past year. He believes the shift began in the United States and will now happen in Europe. If that is right, easing one national rule may clear a path for projects while making the broader question harder to avoid: whether communities will accept the infrastructure Europe wants to build.