An economic analysis of waste heat recovery and utilization in data centers considering environmental benefits

Abstract

Recycling waste heat from data centers is an effective way to address global climate change and achieve sustainable energy development. But at present, the development of the data center waste heat (DCWH) recovery and utilization industry is slow in China, and further research about the economics of such projects is necessary. Thus, based on the life cycle cost (LCC), this paper built an economic evaluation model considering environmental benefits. Net present value (NPV), benefit-cost ratio (BCR), and internal rate of return (IRR) were selected to analyze the economic feasibility and sensitivity analysis was conducted. Take a DCWH recovery and utilization project in North China as a case to analyze. By utilizing waste heat, the project can save 1582.7 tons of standard coal a year and has a significant emission reduction effect. After adding environmental benefits into the project income, the NPV reaches 10,729.7 thousand CNY, the BCR is 1.15, and the IRR is 16.54%. The results reveal that the case is economically viable and that monetizing environmental benefits boosts the project's economic benefits even more. In addition, sensitivity analysis results show that the carbon price has little impact on the project economy at present, while the number of waste heat users and the project's energy cost are the key factors. Finally, corresponding policy recommendations are put forward to promote the DCWH recovery and utilization industry, such as improving project economics by multi-means, encouraging technology research, and improving the promotion mechanism. The findings of the study can not only present new ideas for energy sustainability, but also serve as a reference for important decision-makers and investors.