Ivalo data centre supplies a fifth of local district heat

Finland’s northernmost data centre could provide about 20 per cent of Ivalo’s district heating when operating at full capacity, using waste heat from its servers. The figures were reported by Yle.

The 80-square-metre facility in Ivalo, in the municipality of Inari, has supplied heat to the local network since March 2026. Its output has replaced some of the wood pellet burning used for heating, and is expected to replace peat during winter cold spells.

So far, the facility has produced about six gigawatt-hours of heat, equivalent to the annual heating needs of 300 to 400 detached houses. Ivalo’s district heating production was 26 gigawatt-hours in 2024 and has changed little since then, according to Matti Tammela, chief executive of district heating company Inergia Lämpö.

When spring and summer reduced demand, the company shut down its fuel-burning plants and relied solely on heat from the data centre until September, Tammela said. The facility’s capacity was designed to match Ivalo’s summer demand, allowing as much of its waste heat as possible to be used.

E-Heat, which built the facility, describes itself primarily as a heating company, with data as a by-product. Its chief executive, Lauri Pispa, said 98.5 per cent of the electricity used at the data centre becomes usable heat. A conventional electric heating boiler converts 99.5 per cent of its electricity into heat.

E-Heat maintains the facility but does not own the servers inside it, so it cannot say what data customers process there. The Ivalo centre uses about 1.8 megawatts of electricity.

A change to electricity taxation in July raised the tax on electricity used in data centres by 2.19 cents per kilowatt-hour. The tax rate rose from 0.05 cents in the lower category to 2.24 cents in the general category. Pispa said the change makes smaller data-heating facilities less profitable and is prompting E-Heat to plan larger centres designed for artificial intelligence. Electric boilers remain in the lower tax category. The Ministry of Finance says the same taxation should apply to all data centres.

Data centre projects planned around Finland have prompted debate and concern about the availability of electricity and water.