FOR IMMEDIATE RELEASE
February 5, 2026
Contact: John Neurohr, [email protected], 717-364-6452
ReImagine Appalachia releases report detailing policy options to capture and reuse thermal energy from growing data center industry
Watch a recording of the report release webinar
APPALACHIA — As the first in what hopefully will become a series of materials and events promoting responsible data center development, ReImagine Appalachia today released Catching Heat: The Opportunities and Challenges of Using Waste Heat from Appalachian AI Data Centers, a groundbreaking report examining how the region can turn a byproduct of the AI boom into a resource for heating industry, homes, schools, hospitals, and businesses.
As AI‑driven data centers rapidly expand across Appalachia, they bring both costs and benefits. The question is whether we can find a way to maximize the benefits and minimize the costs with more responsible data center development. Large, around‑the‑clock electricity loads from data centers are likely to drive higher greenhouse gas emissions, local air pollution, and higher energy bills for residents, businesses, and other industries unless we engage in energy planning and support new clean energy development to help meet those needs.
This report hones in on the waste heat generated by AI data centers. Capturing and reusing this heat through district heating systems, thermal energy networks, or nearby industrial processes can improve overall energy efficiency, lower heating costs, and reduce associated water use, greenhouse gas emissions, and local air pollution. AI data center waste heat reuse benefits local communities by lowering heating bills for homes, public buildings, and businesses when recovered heat is used in district or neighborhood heating systems. Local industries that use the waste heat can cut energy costs and on‑site fuel use, gain a steady source of process or space heat, and reduce their environmental footprint.
The report analyzes the technical, economic, and policy landscape for waste heat recovery from AI data centers and finds that success depends on matching heat supply with nearby heat demand. To reach this goal, however, requires creating regulatory and fiscal frameworks that make projects financially viable or providing non-monetary incentives to AI data center developers. More than a dozen policy options across four categories are evaluated in the report. These options include regulatory streamlining, project development support, fiscal incentives, and direct public investment.
“The Ohio River Valley of Appalachia, better known as coal country, has always been an energy region, but for too long that has meant extraction and exploitation by absentee corporations,” said Amanda Woodrum, Co-Director of ReImagine Appalachia. “As data centers rapidly expand across Appalachia, we have a choice: we can let them become energy- and water-intensive facilities that further burden our communities, our lands, and our health, or we can demand that they become true partners in our region’s 21st century, modernized energy future. This report demonstrates that waste heat recovery from data centers is technically feasible and offers tangible community benefits — from heating schools and public buildings to supporting greenhouses and local manufacturing. However, realizing these benefits requires planning and strong policy from the outset.”
Key findings from the report include:
- Turning waste heat into a resource: AI data centers produce large amounts of low‑temperature waste heat that, with the right infrastructure, can be turned from a liability into a local energy asset for nearby homes, businesses, and industry in Appalachia. In Pennsylvania, Gneuton is using waste heat from AI data centers to power equipment that turns excess heat into millions of gallons of clean water each year for local use.
- Proven real‑world models: Real‑world projects in Appalachia and beyond already show how data center waste heat can support greenhouses, factories, research campuses, and water treatment systems, demonstrating practical models that rural towns can adapt. For example, in Ohio, SAIHEAT’s facility captures waste heat from liquid‑cooled computing and uses it to heat local greenhouses, creating a small‑town Appalachian example of data‑center‑driven thermal reuse.
- Industrial park applications: Waste heat from AI data centers can be routed through shared thermal loops in industrial parks to support industrial processes, including agriculture, chemical and materials plants, food and beverage processing, pharmaceutical and biotechnology facilities, power and carbon‑management systems, and water and wastewater treatment operations.
- Proximity and density matter: Projects are most viable where large, consistent heat users are located within a few miles of data centers, making site selection and planning critical for new data centers. In West Virginia, for example, the proposed Monarch Cloud Campus would pair large AI data centers with low‑carbon hydrogen production and high‑tech greenhouses, using waste heat and captured CO₂ to warm greenhouses and lower the cost and climate impact of local food production.
- Policy can unlock investment: Streamlined permitting, upfront engineering grants, tax incentives, and public anchor commitments can improve project economics and reduce risk for private developers. States, for example, could offer faster permitting and earlier spots in the interconnection queue to encourage AI data center developers to design in the option for waste heat reuse, rewarding projects that make it easier to capture and deliver heat to nearby homes, businesses, or public buildings in the future.
“Smart engineering alone won’t guarantee that AI data centers benefit Appalachian communities—public policy has to steer where and how these projects plug into the local economy,” said Deborah Stine, PhD, author of the report. “In my home city of Pittsburgh, steam and waste heat have been used to warm PNC Park, the Carnegie Science Center, the Andy Warhol Museum, and Allegheny General Hospital for decades. With the right policies on siting, permitting, and incentives, AI data centers can follow that tradition by turning leftover heat into lower energy costs, cleaner air, and reduced pressure on local water supplies. The report also includes a detailed comparative analysis of policy options using a “4Es” framework – Effectiveness, Efficiency, Equity, and Ease of political acceptability – to help policymakers and stakeholders evaluate trade-offs and design balanced portfolios of interventions.”Without public pressure for strong policy guardrails, we risk repeating mistakes we’ve seen elsewhere,” Woodrum added. “But there’s a real path towards more responsible data center development that is in keeping with promoting a 21st century economy in Appalachia that is good for workers, communities, our lands, and our health.”The full report, including technical analysis, case studies, and policy recommendations, is available here.