DGA recently launched a new listserv and newsletter focused on data center heat reuse. Below, you’ll find our inaugural message to this community. If you’d like to sign up, you can do so here!
This newsletter was originally published on February 20, 2026.
Good afternoon!
Welcome to a new listserv and newsletter from David Gardiner and Associates, focused on data center heat reuse and opportunities to deploy it in the United States. We’re creating this group to share relevant news and policy developments across the country, and to build connections among advocates interested in the topic.
Our team has been working on this issue for about three years. We’ve published multiple reports and had dozens of conversations with technical experts, lawmakers, utility regulators, climate advocates, and others. It seems that every day we’re hit with another stunning statistic about projected load growth from data centers. To address the far-reaching impacts of this growth, policymakers must use every tool at their disposal to reduce pressure on the grid. Thus far, heat reuse projects (and policies that encourage it) are much more common abroad, but we think there’s momentum building toward greater use of this technology in the U.S.
Our plan for this listserv is to send regular roundups, as well as sporadic updates if news warrants. Participants are also welcome to send messages to the group—and we would love to see this list generate discussion! Of course, if you’d like to connect with our team one-on-one, please don’t hesitate to reach out.
—The DGA Team
Topic Overview
Since this is our first newsletter, here’s a list of some resources DGA has published over the past few years exploring how heat reuse works and how policymakers can support it.
- Data Center Waste: Turning Heat Into Productive Use — This report (which we produced for Intel) looks at some of the best use-cases for data center waste heat, including food & beverage manufacturing, pharmaceuticals, and commercial hot water needs.
- Data Center Heat Reuse: The Opportunity for States — This report gives an in-depth—but very accessible—overview of how waste heat reuse works, including an explanation of the data center cooling methods that are most compatible with heat reuse. It then lays out nine types of policies that U.S. states could enact to encourage or require heat reuse, including financial incentives, permitting regulations, and more.
- We also hosted a webinar focused on this report, which included a roundtable discussion with a Virginia state lawmaker and experts from the National Laboratory of the Rockies (formerly NREL) and the district energy company Ever-Green.
- Policies to Accelerate Data Center Heat Reuse: Achieving Economic and Climate Change Goals — This report (which David Gardiner co-authored for the Open Compute Project) highlights global policies that support heat reuse, featuring 20+ examples from Europe, Asia, and North America.
State of Play
In each roundup, we’ll share thoughts on the U.S. policy landscape, including states where we see the greatest opportunities to advance heat reuse via legislative, executive, or regulatory action.
Momentum in Virginia
- Virginia could be the first U.S. state to pass legislation directly related to data center heat reuse. Delegate Rip Sullivan is advancing a bill that would require the Virginia Department of Energy to explore data center heat reuse potential in the commonwealth. Specifically, it directs the agency to identify heat reuse opportunities across Virginia, consider ways of facilitating communication between data centers and heat users, evaluate best practices or policies from other states/countries, and report back to the legislature. Del. Sullivan’s bill passed the House unanimously (as part of a block vote on items that were unopposed in committee). A diverse group spoke in favor of the bill, including the Data Center Coalition, the Virginia League of Conservation Voters, and Chesapeake Climate Action.
- Virginia’s 2026 legislative session runs through mid-March, and lawmakers have put forward a variety of bills focused on data centers—which are perpetually top of mind for residents in places like Northern Virginia that are home to such substantial concentrations of them. Gov. Abigial Spanberger has also made energy affordability one of her key issues, stating in her inaugural address that “high energy users” should “pay their fair share.”
- Northern Virginia leaders are taking other steps to learn about heat reuse potential. Energy managers from three NoVa counties recently took a “study tour” of data centers in Germany to learn about best practices for sustainable data center development and assess how those strategies could be replicated back home. A recent report on the trip—which was organized by the Northern Virginia Regional Commission—includes a list proposed of short- and long-term initiatives, many of which involve heat reuse and the integration of data centers with district energy systems. Some of those proposals include:
- Developing standardized methods to estimate data centers’ energy use, waster use, and capacity for heat generation
- Developing “quantitative sustainability performance metrics” for data centers and, in the long term, creating an official Northern Virginia “certification or label” to recognize data centers for sustainability achievements
- Developing best practices for localities to incentivize data center sustainability efforts—for example by creating heat districts that connect data centers to potential waste heat offtakers.
You can view the full study here. The NVRC, which represents 14 different counties, has been exploring data center heat reuse potential for years. In 2024, the group published a map showing sites like pools and community centers that could take advantage of data center heat in the region.
Building Support in PJM
The whole PJM region is of interest to DGA, given the projected data center growth and mounting local concerns about their impact on rates, water quality, and noise.
Del. Sullivan sent a letter to PJM in November as part of its proceedings on large load additions, urging the RTO to investigate how heat reuse can mitigate growth. He stressed how significantly data centers will impact his constituents:
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- “As the Delegate representing Fairfax County—part of Virginia’s ‘data center alley’—I am deeply concerned with the impact that data center load is having and will continue to have on my constituents’ electricity prices and service reliability.”
Del. Sullivan then proposes how PJM could incentivize heat reuse, for example by offering priority in the interconnection queue:
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- “Speed to power is the most critical component of data center development, especially as wait times for grid connection lengthen in response to demand surges. PJM should leverage this desire for speed by turning grid connection into a carrot.”
Read his full letter here.
DGA made its own pitch to PJM as part these proceedings—which are designed to settle on interconnection rules for large loads. We suggested that PJM consider a suite of ideas to accelerate connection, which include establishing a large load-specific interconnection queue and prioritizing projects that demonstrate proactive demand reduction, like heat reuse. We also urged PJM to improve its load forecasting and to be sure there’s equitable interconnection of generation to serve general load vs. large loads. You can read our full proposal here.
These proceedings in PJM have been contentious. In January 2026, the PJM Board issued a decisional letter, at the same time as the PJM Governors signed a memorandum of understanding with the White House. While neither the Board letter nor the Governor’s memorandum make an explicit mention of heat reuse, both demonstrate clear concerns about the reliability and affordability impacts of integrating large loads in the region—issues that would benefit from the significant demand reductions that result from heat reuse. DGA will continue to monitor PJM’s tariff changes to identify ways that heat reuse can be part of the equation.
Project Highlights
DGA will also use this newsletter to highlight successful waste heat projects, primarily in the U.S. Here are two recent project announcements:
- KRAMBU Inc., a data center company, is building an “AI factory” in Montana which will reuse its heat at nearby sites. “Waste heat won’t be wasted,” the company said. “It will be repurposed to power agriculture, industrial partners, and community-scale operations.” The data center will be the flagship model for KRAMBU’s Industrial Symbiosis Model, which also involves onsite renewables generation, cogeneration, and “expansion-ready infrastructure for future compute halls and co-located industries.” Learn more.
- The British company Deep Green plans to build a 24-megawatt data center in Lansing, Michigan that will supply heat for downtown buildings by integrating with the Lansing Board of Water & Light’s (BWL) water system. The partnership will provide the BWL—a municipally-owned public utility—with an alternative to natural gas to heat water. BWL’s general manager told the Lansing State Journal that use of waste heat would “offset 25% of the fuel we burn for heat customers, which is natural gas right now. That’s about $1.1 million in savings that will allow us to reduce our budget and expenses and help minimize rate increases in the future.” Learn more.
Thanks for reading our first issue! We hope that you find this information useful. If there’s anything specific you’d like to learn more about, reach out to Hannah Schuster (hannah@dgardiner.com).
