Data centers have traditionally been large, centralized facilities located far from residential areas. Alongside this model, a new approach is emerging: modular and small-scale data centers that can be placed close to communities – in other words, close to where heat is needed.
At the same time, the role of data centers is changing. They are no longer solely part of digital infrastructure but are increasingly becoming part of local energy production as well. A small and modular data center can be located almost anywhere without many of the drawbacks typically associated with large server facilities.
Modular data centers in a nutshell
A modular data center refers to a movable and scalable system. Instead of constructing a single large facility, capacity can be expanded gradually, one module at a time.
“Data centers can be located almost anywhere where sufficient electricity and demand for heat are available,” says Mikko Rantanen, Technical Production Manager at MinersLoop.
The modular structure enables independently operating units without the need for a separate large building. If necessary, capacity can be increased quickly by adding new modules.
This changes the way data centers are viewed: rather than being a single large-scale investment, a data center becomes flexible infrastructure that can be deployed where it delivers the greatest benefit – not only economically, but also at a local and societal level.
A small and modular data center is a quiet neighbour
Technically, a small data center does not differ significantly from a large one. The main difference lies in how and where it is used.
Finland provides favourable conditions for data centers: electricity is relatively affordable, the climate is cool, and conditions for sustainable cooling are highly suitable. Large data centers, however, are not always able to utilize the heat they generate locally, often due to their remote locations.
Small-scale data centers, by contrast, can be placed close to heat demand, for example in industrial zones or urban areas. This allows waste heat to be utilized more efficiently than in large facilities, where heat is produced year-round and often in quantities that exceed local demand. In this way, a small data center can effectively return the energy required to sustain its operations.
In addition, small and flexible data centers can respond quickly to electricity prices and availability. Operations can be reduced or even temporarily suspended when necessary, easing pressure on the power grid precisely when electricity supply is limited.
Locating data centers near residential areas often raises questions about noise, but water cooling changes the situation significantly.
“In smaller units, the noise level is very low – practically comparable to the outdoor unit of an air-source heat pump,” Rantanen explains.
Because heat is recovered through liquid cooling, the need for noise-generating cooling solutions is reduced, particularly when heat is utilized directly.
How much can a single data center heat?
The heating capacity of an individual data center depends on its size. Smaller solutions produce tens of kilowatts of heat, while modular systems can scale to the megawatt level.
In practice, this means that a larger modular unit can heat hundreds or even more than a thousand households annually.
“More than 90 percent of the electricity used can be recovered as heat,” Rantanen says.
Modular data centers also support the transition toward cleaner energy production. They can operate using renewable electricity such as wind and solar power. Through water cooling, the electricity used is converted into waste heat that is transferred into local heating systems. Once heat is recovered from the water and transferred into the district heating network, the same water continues circulating within the cooling system for years.
Waste heat also reduces the need for fossil fuel and biomass-based heating solutions.
Roni Karjalainen
CEO