S2E16

From Waste Heat to City Heat: Data Centers, District Energy & AI | Peter Ott, Danfoss | S2E16

with Peter Ott· Danfoss· 50m

TL;DR

Recovering data-centre waste heat into district heating is a solved engineering problem — large-scale heat pumps and heat exchangers are mature, and liquid-cooled sites make it easier still. What blocks deployment is commercial: who funds the pipe, and who carries the risk when a heat supplier shuts down. Ott argues Europe's real constraints on decarbonised heat are contracts, legislation and a shortage of qualified staff, not technology.

Synopsis

Peter Ott of Danfoss joins The Energy Bridge to work through what it actually takes to put data-centre waste heat into a city's district heating network. His short answer on the engineering is "not difficult at all" — the heat pumps, heat exchangers and near plug-and-play recovery units exist, and the shift to liquid cooling improves the economics. The difficulty sits in the business model: infrastructure cost rises with distance from an existing network, and nobody has settled who pays, or what happens contractually when an industrial heat supplier closes. Ott also explains hydronic balancing and why unbalanced networks force utilities to overproduce heat and fire up gas backup, how load forecasting feeds a hydraulic digital twin, and why he would spend a billion euros on education rather than hardware.

Key metrics

by the numbers · 6

1,000 TWh
projected global electricity demand from data centres by 2030, per the IEA
3,000 TWh
excess heat generated across Europe each year — roughly all residential and service-sector heating and hot water
1 MW
size above which the EU Energy Efficiency Directive requires a data centre to reuse its excess heat where feasible
50%
share of industrial energy use in Europe that ends up as waste heat, per a study cited by the host
40,000
population above which a city faces mandatory municipal heat planning
35,000
openings for electrical engineers and HVAC technicians in Austria and Germany over two years, many unfilled

Topics

8 tags

waste heatdistrict heatingdata centresheat pumpsdigital twinssector couplingenergy efficiency directivehydronic balancing

Stats

Duration: 50m
Words: 7.8k
Questions: 52

Timeline

10 chapters

The arithmetic of the problem
Data-centre demand heading for 1,000 TWh by 2030 set against roughly 3,000 TWh of excess heat already going to waste in Europe.
What the Energy Efficiency Directive now mandates
Data centres above 1 MW must use their excess heat where technically and economically feasible.
From technical sales to district heating
Ott's route into the sector: 15 years in technical sales, metering and IoT at Diehl, then business development and now hydronics sales at Danfoss.
Selling into a sector short of expertise
Why value-based selling matters when utilities everywhere lack qualified staff and the problems keep getting harder.
Connecting a hyperscale site to an old network
Wasting 40°C air while heating water to 80°C — and why a large-scale heat pump closes that gap without difficulty.
The actual bottleneck
Technology is mature and waiting; what stalls projects is the business model and the division of responsibility.
Hydronic balancing, via a garden hose
Poke holes in a hose and the far end barely trickles — the analogy for why networks are overloaded to serve the last radiator.
Load forecasts and the hydraulic digital twin
An AI load forecast checked against a hydraulic model, giving temperature, flow and pressure guidance plus an optimised production plan.
Lessons for CEE networks
Why Ott will not rank cities, what Vienna and Denmark demonstrate, and where he sees leapfrogging straight to fourth-generation heating.
Quick-fire round
The most underrated technology, a hedged verdict on waste heat by 2035, and a billion euros spent on education.

Key insights

5 takeaways

01
The barrier to data-centre heat recovery is contractual, not technical
Ott's direct answer on connecting a hyperscale data centre to an old district heating network is that it is not difficult at all: heat pumps lift the temperature, heat exchangers do the transfer, and Danfoss ships near plug-and-play recovery units. What is unresolved is who funds the pipe and what contractual guarantees cover the day a major heat supplier shuts down.
02
Unbalanced networks are what force fossil backup back on
To get enough heat to the last radiator, an unbalanced network has to run higher flow rates and temperatures, raising pumping electricity and returning unused energy. The more heat a utility must produce, the likelier it is to fire the backup gas boiler on the coldest days even when production is largely decarbonised.
03
AI load forecasting is only usable when physics checks it
Danfoss builds a five-minute-granularity demand forecast from historic consumption and precise weather data, then runs it against a hydraulic digital twin. Ott's framing is that AI and physics have to be brought into balance — the twin supplies the pressure, temperature and flow constraints the forecast alone cannot see.
04
Waste heat is an energy-security argument, not only a climate one
Ott calls surplus heat from industry, data centres and even supermarkets the biggest untapped potential in Europe. Reusing energy already inside the system reduces imported fossil fuel, which the conversation ties directly to European energy independence as well as affordable heating.
05
Staffing and legislation outrank hardware as roadblocks
The two objections Ott meets most often when pitching digitalisation are legislation and a lack of qualified people. His example is concrete: a connection plan is worthless if a rule permits opening a given street only once every five years.

Pull quotes

6 quotes

You need to know why the CEO of your target customer cannot sleep at night.
Peter Ott
The technology around is mature and just waiting to be implemented, basically.
Peter Ott
It's the biggest untapped potential that that we have in Europe.
Peter Ott
The optimist in me wants to say true. The realist in me will say false.
Peter Ott
You're only allowed to open the street once every 5 years.
Peter Ott
And ideally sales people need to stop talking a bit and start listening more.
Peter Ott

Transcript1391 cuesClick a timestamp to jump

[music]
>> Welcome to a new episode here in the
energy bridge. Today we have the
pleasure to have Peter Ott from Danfoss.
And we are going to explore how to use
waste heat from data centers into
district heating. So it's a
super interesting topic. We have had
some data center experts, district
heating expert, and now you are
preaching both topics, so it's great.
>> And you guys are called the energy
bridge.
>> Yeah, exactly.
That's the idea. So just to have a bit
of context, according the International
Energy Agency, the global electricity
demand for data center will reach 1,000
terawatt hours by 2030.
But at the same time, the excess heat
generated across Europe is estimated
almost
3,000 terawatt hours.
Which is
the same amount to supply all the
uh residential and service sector
heating and for hot water. So that's
huge. Also in the regulatory side, the
European Energy Efficiency Directive
now mandates that data centers that are
bigger than 1 MW, they must utilize
their excess heat
um where is technically and economically
feasible.
So the question for this episode is now
that we are using this boom of AI, that
means boom of data centers,
can we use the waste heat to decarbonize
our cities?
So now we're going to explore. Peter,
thank you for coming, and let's dive in.
>> Yes, thank you very much for the
invitation. Very happy to be here.
>> Thank you very much.
When we dive into the main topic, before
that, please tell us about yourself,
where where you grew up, what did you
study, and how had been your journey so
far? How come you started recovering
waste from waste heat from the data
center and from other places?
>> That has been quite a ride, actually. Uh
Uh so, I grew up not very far from here.
Like 20 km outside of Vienna.
A town called Gänserndorf. That's where
I grew up. That's where I still live
after 44, almost 45 years.
Um and how did I end up in that sector?
Uh originally, I had a
much more commercial background.
And after first few jobs, I actually
landed in a in a smaller company for
technical sales
called V-Tech Power. And we were selling
electrotechnical components to the
industry.
From automotive industry to medical, to
the power sector, to the defense sector,
in a in a very wide geographical area,
like from
Austria to Russia and everything in
between. So, that was my very early
start, uh already very technical,
despite having a commercial background.
So, it was a bit little bit of a tough
jump into a cold water.
>> Yeah, sure. So, everything in English or
you speak another language from the
region?
>> Let me say I can in many countries order
a beer.
>> [laughter]
>> Very Austrian.
>> Yes. That's the first thing you learn.
Several sentences in in other languages,
but not fluent. Uh and I did that
actually for almost 15 years.
Uh and at at one point, I started to
decide so, I gained a lot of technical
knowledge over that time. And at one
point, I thought I want to pick that
actually up with the theoretical
knowledge with the academic background
and started to study in the evening, so
after work.
Uh and I visited the University of
Applied Sciences here in here in Vienna.
And they had a study called uh
technical sales management, which I
thought, "Okay,
this is it. [clears throat] This is Mhm.
Where you get uh equally the technical
background, but also can build up your
expertise on the sales management part.
Mhm. And uh while I was into that, uh I
decided, "Okay,
let's not stop with the bachelor's. Uh
let's put the master's on top." And then
I did
uh a master's in engineering on top of
that. Uh and also a master's in sales
management.
>> Yeah. Your Your master's Your master's
[clears throat] thesis was about digital
transformation for utilities using IoT.
There you got the
IoT things and digitalization,
measurement.
>> Exactly. But so
why did I end up there? So a little bit
before I actually after 15 years of
working in this technical sales, I
actually switched the company and went
to the German Diehl Group. Mhm.
Where I was in Diehl Metering and
responsible for the portfolio management
in in
uh the biggest part of the European
region for water meters, heat meters,
gas meters, but also the IoT
connectivity portfolio and the software
on top of it. And that actually gave me
a real real good insights and deep dive
and uh actually sparked my curiosity
uh to the topic. And that's why I also
did the master's thesis then.
Uh
actually completely related to the
topic.
>> And you also said something about
value-based selling. What
>> Exactly. And that's what That was for me
the the natural next step uh because
it's such a complex topic. And if you
look at the uh
energy sector, if you look at energy
utilities that have been most of the
times uh in the last decades
had a monopoly situation, very stable uh
business models. Centralized. One single
source of fossil based. And all of a
sudden the the whole all of the
processes that the business model all of
that drastically changing basically
overnight. This needs a different
approach to bring not only components in
into a market, not only selling for
example valves or heat meters to this
kind of utilities, but there is a
certain aspect that is special in these
critical times. You
need not only suppliers. You actually
need partners. You need trusted advisors
that can help you also through this
transformation process.
>> I mean, good. Welcome.
Yeah, no. It It It's
Actually, we had the this question since
you are
a technical [clears throat] expert in
and and a salesman, how critical is to
have a good sales strategy to convince
these conservative stakeholders like a
municipality or a utility?
How do you address it?
>> Um for me that's actually the key
because one of the big challenges if you
look at the specific factor, if you look
at utilities, if you look at the energy
sector as such, the one thing and
independent in which country you look
at, the one thing that most of the those
companies have in common is actually a
lack of qualified staff. There are less
and less people with the right expertise
and at the same time
the environment gets more complex, the
problems get more challenging day over
day, [clears throat] night over night.
Which is why also from a supplier point
of view, you need to adapt, you need to
change your business model. And the the
very core of value-based selling is you
need to start at the point of
understanding the business model of your
customer.
>> Mhm.
>> You need to know why the CEO of your
target customer cannot sleep at night.
What's the one problem why he's waking
up at 2:00 a.m. in the morning sweating?
>> Yeah.
>> [laughter]
>> Okay.
That's what you need to know because
that's his problem and then you can
build
your solution around it to solve exactly
that problem.
>> Interesting. And also um
before then you started working for at
Danfoss tell us about your role at
Danfoss at will and you mentioned you
worked at Diehl Metering and you worked
across CEE region. We hear a lot about
data being the
the new oil but in district heating gas
is the the king.
So they is data the new gas?
What about how did your years of smart
metering and IoT is shaping your your
work at Danfoss now? Please tell us
about your role at Danfoss at
>> Let's let's start with data is the new
gas. Well data is the new
electricity, data is the new gold dust
that we have. What really shaped my mind
working in Diehl, working with
data based business model in the energy
sector is really recognizing
that
data may be the new gas but you need to
utilize it. So it all it all boils down
to
not having just the next data cemetery
somewhere but what is the actual
information you can get out of this data
and how to utilize it to actually
optimize what it is that you are doing.
This also narrowed down that at this at
the same time of course you all
you also recognize other companies on
the market and I knew Danfoss already
because deal and Danfoss both work in uh
with the district heating sector. At
this time a position opened up at
Danfoss which
and our
I always since ever since I got to know
Danfoss I admired them
uh for the vision that they are
promoting. So, I had to utilize this
opportunity to join Danfoss
and uh started to work as
in business development for the district
heating sector for the DACH regions of
Germany, Austria, Switzerland.
Uh basically then took over some
additional markets and actually in South
Europe like France, like Italy, like
Spain. Then took over the business
development team for our digital
solutions for the Leanheat software
suite which is an
end-to-end software suite for basically
the heating sector from
heat production to heat consumption in
the building.
And uh as you said initially just
recently a few weeks ago I actually
changed position in the company.
Uh I moved back to where my roots are
which is in sales and I took over the
sales uh team for the DACH region so
Germany, Austria, Switzerland for our
hydronics uh division
which is everything heating related.
>> All right. We We We're going to come
back with the
uh this concept. Going back to the like
the elephant in the room, the AI and
data center because AI is
eating the grid.
But at the same time data centers are
bleeding
with heat uh wait waste heat.
Um
and we are wasting like 40° air from
data centers
and at the same time we are heating up
water until up to 80
degrees to to supply
uh water hot water demand. How difficult
is uh, physically and digitally to
connect the big big data center, like
hyperscale data centers,
um, into the old district heating
systems?
How How difficult it is?
>> The The short answer is not difficult
[clears throat] at all.
>> Mhm.
>> The technology is there.
>> Yeah.
>> Yeah. You uh,
if you have a if you utilize a
large-scale heat pump, you can boost the
temperature of the the wasted
temperature that you get up to a certain
level that is really enough to heat a
certain district.
>> From air, from hot air to get hot water,
is possible?
>> That That is possible, but uh, it's of
course even uh, even more efficient, and
this is where we see the data centers
uh,
are going
uh,
in a liquid-based cooling, and then it's
even more.
>> Just by curiosity, if
if it's possible to use the same
technology to recover heat from data
centers to be used to recover waste heat
from hydrolyzers?
>> And I said, in in theory, yes. Uh, we
may we may need to replace one of the
other component or adapt a little bit,
but in in in general, this is absolutely
possible.
>> And the key
component is heat exchanger. That's the
very mature technology and
then that's what you
>> Yeah, the heat exchanger is what is is
one of the core components in in in such
a solution, but especially, for example,
for the data centers, we've built
complete uh, heat recovery units
that uh, now some colleagues might kill
me for that, but I like to still like to
call it that. They're almost
plug-and-play solutions.
On the digital part,
if you
have certain
if you meet certain requirements, and
one of them is has your network
a certain digital maturity already.
Uh and I mean, if not, I just happen to
know a company that can help you getting
there. If you don't have a certain
software solution around that that is
able to manage that, then it's not
difficult at all. The complexity, and I
think that's one of the big topics why
we are not accelerating as much as we
could,
is
the business model around it and the
respons- clarification of the
responsibilities around it. Who pays for
what?
>> Mhm.
>> Uh what happens if, for example, uh and
this is independent if it's a data
center, if it's an industry, if as long
as surplus heat is being used, it starts
to be a main source for the for the
heating grid. What happens if an
industrial company that is supplying a
major part of the of the of the heat to
the heat grid,
>> Mhm.
>> if this
uh decide that tomorrow they will close
down.
>> Mhm.
>> How to replace it? Who pays for that?
What are the contractual uh guarantees?
>> Mhm.
>> What are the obligations?
>> Uh I I it's you just touched upon it and
we also have the question that we wanted
to ask around that now
uh with EU, there's a directive that
it's that kind of mandates, right? Like
essentially mandate that waste heat
recovery
uh from large data centers. Uh
>> [clears throat]
>> we want and but and then who pays for
the infrastructure is exactly the
question that you're also asking. And
and then
what is the bottleneck then? Like is it
the heat pump technology or or or the
business model between the tech giant or
people who
>> From From my observation, it's it's
really down to the to the business model
and to the to the contracts. The
technology around is there. The
technology around is mature and uh
just waiting to be implemented,
basically.
>> Now that you mentioned your new role,
that you're you are uh seeing now
hydronics,
so if you could explain what it is
first, and then go deeper.
>> Yeah. So, uh the hydronics division in
Danfoss is summarized covering
everything that is
heating related. Or, let me even uh
reshape that a little bit.
Everything related to water-based
heating, yeah? And we do basically from
a radiator thermostat over
pressure-independent control valves to
controllers, substations, up to these
heat recovery units and optimization
software on top of that, and everything
in between.
>> So, it's the solution for data centers
with liquid cooling.
>> Yes.
>> Uh and for other solution, which uh
other business case Well, you have
>> As as long as there is a water-based
heating
>> Mhm.
>> attached to that, we can find a
solution.
>> Okay. Just to let you know, because this
is a super interesting topic, the
thermodynamics laws say that energy is
not destroyed, it's uh just transformed.
We are
flirting with the idea of making a
research
about uh
circular energy, like how to make
the whole energy system more circular.
And heat waste
uh it's a major part, because
I think that I saw one study that it's
like 50% of the all energy
used in the industry in Europe, 50% is
heat waste, after all.
So, it's not recovered. This is a huge
numbers that we are just
>> Yes, it's it's the biggest untapped
potential that that we have in Europe.
>> Yeah. So, and it's in the current
uh situation, I mean, we are in March
26th,
everything that is happening in in
Middle East uh
and all the topics around energy
security, energy independence and we are
going to see in the next in the
following months how everything evolves,
but how to increase the
energy independence in Europe, it could
be also to foster more this kind of
solutions of
using the same energy that is around the
system and not getting more fossil fuels
from outside.
>> That's that's exactly
that's exactly
the plan. The waste heat from industry,
from data centers, even from
supermarkets. As I said earlier, it's
the biggest untapped potential that we
have and one of the very big levers that
we have to actually decarbonize heating
system
reducing or even ending the dependency
on the on the fossil fuels. Doing so
also enabling affordable living,
affordable heating.
>> So this is the the the whole thing is I
don't know hydronic balancing.
>> Yes.
>> [laughter]
>> But what essentially if you had to like
uh
>> If I have to explain what what what what
hydronic balancing is.
Um
Imagine you have a water hose.
Standard regular water hose you you're
watering your garden with.
>> Mhm.
>> And now imagine that every 20 cm in this
water hose you poke a hole.
>> Okay.
>> And then you turn on the tap water.
What happens?
In the first hole uh hole in the hose,
that's the closest to the tap water you
will have a big fountain of water.
>> Mhm.
>> Okay.
>> In the second hole the fountain is a
little bit smaller and a little bit
smaller. And at the very last hole only
a few
uh drops of water start trickling out.
And now
imagine that at this very last hole in
the
in the hose you need a certain amount of
water with a certain pressure and a
certain flow. So, you turn up the tap
water even more even more until you
you get the desired amount of water out
of this last hole. What happens on the
previous holes? You overflow all of them
continuously.
Hydronic balancing is tackling that uh
and making sure that you get the same
flow rate, the same pressure levels on
each of those holes.
So, that you don't have to overshoot on
all of the others just to get the last
one.
>> So, depending on the demand of the
previous holes, how much pressure you
>> Exactly. And now now imagine one of
these uh multi-family houses right in
right in front of us. And now we have a
uh either a district heating substation
or a boiler or whatever you have it in
the basement.
And now in uh use that example with the
water hose and imagine the last hole in
the water hose is the last flat at the
very top, the last radiator.
>> Mhm.
>> In an ambulance network, you have to
overload basically the the full network
uh the full heating system so that the
last radiator gets uh gets enough heat.
And that's why it's important. And now
utilize the example from this one
multi-family house and scale it up
through the whole city.
>> Very well explained. I can see it.
>> And in in the electrical side is like
long lines
>> Yes, it
>> you lost
>> You you it's a
>> voltage
>> Exactly.
>> with the current.
>> Exactly.
>> Just to
understand the importance of it as well
uh when when the heat is kind of
traveling, so how much are the losses
and and why this is so much more
important as you said. I mean, you
explained about the whole city, but
what's the importance because
when we say things are get for
electricity, there's a lot of AI
enablement that is happening, but what
what's on this
uh stage for heating? What is
>> If if you if you take it for a district
network, for example,
uh the thing you have to do is to you
have to produce more heat.
And you you have to push this heat in
You have to distribute that energy with
higher flow rates. That means you have
increased pumping costs. You need more
much more electricity for the pumps
pushing the the hot water through the
network.
In in both directions because you also
create a
situations where you have too much
energy on a
distributed on a lot
of places. They can't be transferred
to the secondary side. So,
too much energy is actually being
already then being also returned back,
which again increases pumping costs,
increases the electricity that you that
you need for the pumps.
And the more energy you have to produce,
the more you come into a situation where
you actually have to rely back to fossil
fuels because even if you have
decarbonized your heat production
set up to a certain
level already. Specifically in the very
cold days, the coldest day of
of the season, then you may still have
to fire up the
backup gas boiler in order to
actually
>> [clears throat]
>> supply the network.
>> And you previously worked with a lot of
digital solution. I was just reading.
So, with digital twin for cities
district heating network, how exactly
that works and how can you use it to
lower the peak demand? Let's say it's
freezing in Vienna and it's a freezing
still freezing in March, but yeah.
>> Let's take Let's take a day like today
or even one of the colder ones like in
January. How can you reduce
the temperature and the heat losses on
the coldest day of the season?
Basically, everything starts with a load
forecast.
>> Mhm.
>> If you want to optimize, if you want to
reduce, you need to know the actual uh
heat demand in your network. And this is
This is something we can do, and this is
the basis basically for every
optimization approach.
Uh
>> With a digital twin.
>> We can do that heat demand we can do
actually
without the digital twin as well. We can
do that before. Uh
>> Okay.
>> Simply based on uh
historic consumption data.
>> Okay.
>> And a very good weather forecast.
>> Mhm.
>> So, here it it's not enough if you watch
the news at night and look how is the
weather going to be tomorrow, and then
you
pinpoint what might be
>> Yeah, okay.
>> the demand be, but you really need a
very precise uh
>> And just in that note, how do you work
with
uh GDPR in that case? Because it's
personal data with heat consumption is
it's similar with electricity that is
this
>> Of course.
>> discussion. How do you address it?
>> Uh We address it in in that case that we
have actually set up uh
a system that is completely
GDPR-compliant. This is also something
that we actually offering to our
customers that do not want to
uh
It's one of these additional
complexities I mentioned that this was
not a topic 20 years ago.
>> Mhm.
>> Uh but uh it's
uh personal consumption data. This is a
super GDPR-reliant. This is uh
uh
This is relevant for NIS 2 for
cybersecurity, and and this is a service
that we provide that we uh can actually
manage the data in a secure and
GDPR-compliant way. We can build the
load forecast based on that. Then we can
do basically two things uh with that
load forecast. With that knowledge down
to a very granular level uh
And granular means that um we get a
5-minute plan of the changes in demand
for the next few days.
>> About these solutions though, uh done
for being a is a is a huge company and
you have traditional solutions.
Are you kind of uh
because you also produce and it's
essentially you have digital solutions
and hardware solutions. So,
>> Exactly.
>> And how are you competing in the market
for the digital solutions?
>> Let me get to that. Just a just in a
moment, but then
let's let's briefly get back to this
digital twin uh okay. Stuff so what what
is it that we then do?
Uh if you have that load forecast,
you can feed that load forecast in the
digital twin of the network. And uh the
digi- because the load forecast is an
AI-based solution.
>> Mhm.
>> And then you need to balance that check
that against a hydraulic model. So, you
need to basically bring AI and physics
into balance.
And the digital twin simulates the
hydraulic constraints that network. How
balanced is it? What Where are the
bottlenecks? What kind of pressure
levels?
>> Pressure, temperature.
>> Exactly.
>> Yeah.
>> A digital twin gives you
actually exactly that. It gives you
real-time insight on every point in the
network. You you have immediate overview
about the hydraulic conditions, about
temperature, flow, and pressure levels.
>> Mhm.
>> And the
feeding the load forecast into a digital
twin, you can simulate in the future.
And then you can pinpoint exactly,
knowing the demand, knowing the
hydraulic constraints, you get an
optimized plan what kind of temperature
levels, flow levels do I need to feed
into the network to actually
uh meet the target demand of heat on the
consumers.
>> Mhm.
>> So, you can historically you a utility
would typically
go on the safe side,
produce more heat,
feed higher temperature in the network
because the worst thing that can happen
is
a customer would call and complain that
it's cold.
>> And that should never happen.
>> Yeah.
>> So, rather be on the safe side.
So, this is what
what you can actually immediately do
with a digital twin and the load
forecast,
know the exact temperature level that
you need to provide. Second thing that
we can do with the digital twin with our
solution is
then actually make an optimized
production plan
>> Mhm.
>> out of that. So, we we tackled that
earlier. Historically, you had one
single source of production, mostly
fossil
>> Yeah.
>> fuel based, and now you have a
decentralized decarbonized setup. You
have renewables, you have waste heat.
You have
>> Many sources.
>> biomass, many sources.
And the digital twin can also give you
an optimized production plan. Not only
what kind of temperature levels do you
do you need to to supply, but how to
produce uh
>> Mhm.
>> the energy in the most economical
way
that's possible for you.
>> So, to orchestrate all this chaos, you
are using digital twins,
but also the IoT part, you can also
operate remotely heat pumps or some uh
kind of pumps to increase pressure or is
all automatized like
>> It It can be all automatized, yes. So,
you
typically you have certain levels of
automatization you go through. Uh I have
yet to
to see the company that would go from
100% manual to 100% automatized.
Typically, you go through phases. Yeah.
It's a It's a transition phase. But it
of course helps us that the physical
components in the network from
controllers to the remote controllable
control valves, that this is actually
what our company based on. We've been
producing valves for over 90 years. So,
we know exactly how these components
behave and how to control it.
>> And just
because now energy security is a big
topic.
Now, just thinking out loud that would
it work the system with no internet, for
example, to orchestrate all these chaos
in district heating?
>> To a certain extent.
You of course also need to set it up in
in such a way.
Again, for for two angles you you would
need to consider.
Uh at one point, if you reach a certain
level of digital maturity, all things
are connected to the internet.
>> Exactly.
>> If the internet breaks down,
parts of that are not connected
anymore.
>> Mhm.
>> That doesn't mean that the whole system
is stop
stops stops working. It It just means it
continues working on you know, uh blind.
On the last setup.
>> Mhm.
>> That that it had on the on the last
command.
>> Okay.
And getting back, Peter, to
you said Danfoss has been
manufacturing world for 90 years and for
for a hardware company to have digital
to anything the digital solution.
How's the market look like because are
there
it it helped you that you have a lot of
knowledge for
uh
like for decades of creating such
systems and now also with the digital
solution you are able to uh reach out to
the clients better as you said
value-based selling as well.
>> That's that's that's how it how it comes
together. As as I mentioned initially,
if if you want to be a stronger partner
for your customers,
if
you take the concept of value-based
selling that you actually want to solve
the critical customer problems and
build solutions around it.
Uh adding the digital layer, the digital
umbrella over our portfolio was the only
logical step.
>> Mhm.
Yeah, and also the energy management
system, but also IoT to operate
remotely. So, it's all together.
>> It It needs to go hand in hand. It
doesn't make sense to to just
cherry-pick.
>> Yeah. And do you offer only the digital
solution as well, or it goes hand in
hand?
>> We offer whatever solves the customer
problem.
Sometimes that is an
a very complex solution setup of
software, service,
IoT connectivity, components, full
systems.
Sometimes it's a single wealth.
Sometimes it's a standalone software.
Whatever solves the customer problem is
what is is what we're offering.
>> Okay. And now taking advantage of your
knowledge in the region, Central and
Eastern Europe, what would you say that
is a learning that
big cities as Warsaw or
um you know, Budapest could be.
Which lesson
this
um big cities could take from Vienna to
accelerate this use of
um waste heat and to use district
heating?
>> Overall, it's a it's a tricky question
to answer because uh
knowing most of this networks and how
extremely different they are to each
other.
Uh specifically this kind of old
networks that have been historically
grown
over the years. The complexity is is uh
let me say similar, but different.
>> Okay. But what lesson
>> But the lessons learned
I
without pinpointing it to to any city
because
also in in the cities you mentioned, I
see really good progress currently.
But
if
we would bring one city network
management
to for example, Vienna or to Denmark
where also
the district heating networks are very
advanced to the to the biggest part.
And when we talk about utilization of
wasted, I think the one lesson learned
is that seeing is believing.
And you can see it's possible.
Utilizing the wasted is possible. The
solutions are there. You can
move forward and do it.
>> Yeah, this is one of our thesis in the
new bridges
that is not anymore a technological
issue. I mean, all the solutions are
there. Now it's more political
willingness or social awareness, social
participation as well. It's a We're in a
new era in the transition.
>> absolutely.
>> Yeah, and also just going back to the
utilities in in this region like in the
in the central and eastern European
they're kind of skipping the analog
phase. It's like how in India we didn't
need the landline. We just everyone
jumped on the mobile phone.
>> So, leapfrogging.
>> Leapfrogging. Yeah, pretty much. So,
what do you think like they will just
straight away jump to the IoT AI-enabled
services in the
the heating part as well or
>> Yeah, so so typically we we we we look
at at district heating networks in in
generations. Like first, second, third,
fourth generation of district heating.
With uh
and what what we see currently is some
networks
have been going step by step through
every generation.
And
in some markets we actually start to see
this kind of leapfrogging that they
start to develop from the second
right into the fourth generation.
>> And could you give us names like which
country would you
>> I'd rather not.
>> Okay, but it's advancing. I mean to keep
an eye in the region that it's
leapfrogging and okay.
>> Yeah, nice. So we have reached the quick
fire round or do you have another
question?
>> I just have one more question before
I mean in terms of
you're you're working for a company from
from Austria.
>> Yes.
>> And which are the regions are you are
you looking at the entire Europe or
>> Uh so right now in my new role
I've refocused on Austria, Germany and
Switzerland. In my previous role I was
I was leading the the the team that had
the global responsibility with the focus
markets in
in Europe.
>> Yeah, and I was coming to that because
is it because of the complexity of the
whole heating system
that you need more focus within a region
and then within one region the system is
complex and it needs
uh
>> You you you need
dedicated teams in in each of the
regions. It's
it comes down
to a certain level of complexity. While
the the overall physics and so on of
course
are always the same and up to a certain
level, you know, the the systems are the
same.
What's different is the environment
around that. Coming from
local legislation for example
uh up to how is
a utility or a network operator
organized.
Uh in some countries you have much more
public owned utilities and others it's
private contractors operating the
networks.
Uh it's there's just so much
local individuality that needs to be
tackled.
>> I I know we are getting to the last leg
of the interview, but I I just have
a lot of curious questions that that's
kind of
got left. So, I want to ask them all
before we
So, about
>> Today's opportunities.
>> Today the opportunities as well. So,
about just getting back to the data
center topic. So,
especially in data centers and as we
heard in our with this advisory group
interview as well that
it needs to be built where
where you have the the power. Where I
mean, essentially they they would like
it to be built close to a bigger power
stations or where the bigger energy
storage facility being How how essential
you think that it will be going forward
forward to also bring the heating
infrastructure there? Or is it already
in the discussion that let's build So,
right now we are thinking more from the
data center's perspective where it needs
to be built, but more from making a
business case it has to be also built
let's say for a hospital which
[clears throat] requires a heating and
you create a data center just over there
and the heating could be used just over
there. So, like the smaller ones or the
hyperscale ones and what's your view on
that?
>> Um
my my observation is
that it is being considered in the
initial planning phase.
Specifically with European Union
legislation moving forward making it
also mandatory because that comes then
of course with certain infrastructure
investment costs. The farther you are
away from an existing district heating
networks, the larger the pipe you need
to lay into to ground and
um that's a lot of money to consider.
>> Mhm.
>> But, we also, at least from my
observational point of view, it's kind
of in a transitioning phase right now.
At one,
at which point this starts to get the
relevant point of discussion.
>> Mhm. Mhm.
>> And it's going back to the Sorry, uh,
the business case question,
uh, because it's like the same It goes
back to the business case. Everyone
should have a business to use feel that
all these stakeholders need to come
together as well to
>> This is mandatory. Any kind of uh,
projects that are uh, across sectors.
>> Mhm.
>> Uh, so if we utilize this phrase of
sector coupling, that is typically much
more when we talk about power to heat,
or so but
also data centers to district heating is
a sector coupling topic
at the end of the end. This is
and it it really requires that uh,
stakeholders from all involved parties
sit down
>> Mhm.
>> and align this.
>> Yeah. But, uh, good question. I liked it
because now I'm I'm thinking another
one, but what happened with the cities
that they don't have these heating, but
it's mandatory to use it. So, what other
solutions are?
>> I think you can I would say you can
always build a district heating network.
>> So, they have
>> That's that's that's that's the more
easy answer. Uh, but but of course, we
have additional legislation that that
are relevant here. There's a mandatory
heat planning, uh, for example, that
um, depending how it's translated into
law, but all, let's say, cities
with more than 40,000
uh, people living there need to make
have a mandatory heat planning to do how
to decarbonize the heating in the city.
In a lot of those where today there is
no district heating network, district
heating will play a major role for that.
>> Yeah, great. And
now that you mentioned
uh
the importance of coordination between
different stakeholders and policy makers
have to be in the discussion. This is
our main concept and in our forum in 2nd
and 3rd of June, we're going to have a
session specifically to address
uh the use of heat waste um in in data
centers and in the panel discussion
we're inviting policy makers, academia,
industry, and startups. So that would be
great. So, we hope to [laughter] have
you have you there.
Uh yeah, so now we go to the
uh quick fire round
questions and
the first one is relating to the
technology.
You have a broad expertise in different
technology parts. In your opinion, which
one is the most underrated one? It's um
heat exchanger, smart meter, or AI
controller?
>> Whatever my answer now will be, somebody
in my company will be angry.
>> [laughter]
>> So, I need to be very very careful.
>> Hey, you can say all.
>> Yeah, I would say all if if I have to
choose between those three, it's it's
all of them all of them at a different
point in time were the most underrated
ones.
>> Okay. Like in different period of time,
they were different. And now, what is
the most underrated?
>> What what whatever the hot topic is
right now is is always the the
>> Heat exchanger is uh
>> Yeah,
yeah, for me it is heat exchanger. I
think it's
>> The heat exchanger is such an such an
essential integral part uh of of making
everything happen, yeah.
>> Yeah.
>> Okay. But regards to your team, that uh
>> [laughter]
>> you you are taking care of it.
>> I would say the pressure independent
control valve.
>> [laughter]
>> Into And uh
the about the grid,
tell us if true or false and how you
what you feel about it. By 2035, you
think the major majority of urban
heating in in Europe will come from
waste heat rather than the primary
generation.
>> Ooh, that's a tough one.
>> [laughter]
>> The optimist in me wants to say true.
The realist in me will say false.
>> Okay.
>> Ooh. Um now that you mentioned that your
sales strategy is to ask a CEO, "What
keeps you awake at night? What keeps you
awake at night and sweating?"
I did not expect that question.
>> [laughter]
>> Well, that's a good one.
To be to be quite frank, project status.
Partially.
>> Okay. To get the deadlines set.
>> Yeah.
And
very unspectacular, I'm afraid.
>> And do you have any deadlines
approaching?
>> Every second.
>> Every second. Okay.
>> [laughter]
>> No.
Um
we we did talk about it before we
started the interview and you you
you have an answer for us. What would
you do
with 1 billion if you have to accelerate
energy transition in your own way?
>> Where I would invest it.
>> Yes.
>> Education.
>> Wow.
Yeah.
>> Where?
>> Like develop more.
>> Two angles, actually.
On one hand, I mentioned it earlier.
There is still a lack of qualified staff
in most of the countries. We need more
energy experts.
But on the other hand, we need to make
energy awareness, climate awareness. We
need to make that just such an integral
part of our education system.
>> We We published an article
that we did together with
Mark uh with a workforce intelligence
company from US.
And
the few the some of the roles which is
increasing in Austria and Germany. So, I
mean, it was taken with all the openings
that were coming in Austria and Germany.
And in last 2 years, there have been
35,000 opening for uh electric engineer,
HVAC
technicians and all of that. I mean,
it's so interesting that these roles are
getting becoming the
the whole core of going forward. And
And a lot of them were unfilled.
>> Absolutely. Absolutely. If you If you
talk to most of the installers here in
the region, everybody will say he's he's
they are understaffed. They're looking
for
qualified people. They're looking for
experts.
>> Mhm.
Yeah. Also, another output interesting
from this article is how influence the
legis legislation, European regulatory
framework into
uh skill market and um
in energy specifically. It was super
interesting. We invite you [snorts] to
to review it.
And since you are a salesman, you speak
with a lot of CEOs from utilities,
uh
could you share uh with us some hard um
objection that
that you have received when you are
pitching digitalization and
>> I'm afraid uh
a little bit that I then I'm start to
repeat myself, but it's actually exactly
those two topics we just discussed.
Legislation
and lack of qualified staff. That's two
of the major objections that we that we
face. Two of the main roadblocks that we
that we that we see when we work out
this these kind of projects together
with our customers. Um which is also a
big part of let's say blocking the
acceleration of the energy transition.
Uh you can make a plan as as good as you
want how to how many
buildings you want to connect to the
district heating uh system in what kind
of time frame. If there's a legislation
that says
you're only allowed to open the street
once every 5 years.
>> Yeah.
>> You will not lay a pipe there
>> Mhm.
>> for the next 4 years.
>> And Alister Peter, uh
a question this is not so much quick
fire but rather uh a question to you.
You spend uh two decades selling really
hard solution. What what kind of skills
you think uh it's required in the market
right now? So someone who have uh a soft
skill and also that they have some
technical skills that to grasp the what
is happening in the energy sector and
and that becomes that makes them more
qualified for the role or uh vice versa
because earlier as well um in sales
sales people always need to be jack of
all trade but what kind of essential
skills that you see in them?
>> The one key skill
>> Mhm.
>> I would like to put more more emphasis
on is listening. In sales
we tend to talk a lot.
>> [laughter]
>> And ideally sales people need to stop
talking a bit and start listening more.
Only with listening and linking back to
a little bit to the value based selling.
Only when you listen to what your
customer is saying, you can actually
figure out what the problem is, why they
cannot sleep at 2:00 a.m.
at night.
>> Yeah, that's
>> Only then you can start uh
solving that problem.
>> Yeah, my my grandma used to tell me that
we have two ears and one mouth so listen
more and speak less.
>> [laughter]
>> And that completely holds true today.
>> Yeah.
Um yeah, so maybe as
um
some some closing notes or some advice
for new sales professionals that are
getting into the energy sector, which
advices would you give them?
>> My number one advice if if you want to
be in sales in in exactly this sector,
uh you need to understand the sector.
>> Mhm.
>> And if you do that,
uh then I'm quite confident you can be
successful.
>> Amazing.
Well, on that note, Peter, thank you
very much for giving your time. Uh
>> [clears throat]
>> at the
I have to mention that uh
I also did some some thought I I come
from technical background and I did a
bit of sales. This is the most killer
combination right now. If you
>> It it it really is. I mean, there's
there's a really a a reason why
uh at the University of Applied Sciences
there's a dedicated study
for that. It's
if you look historically, if you
from a classic skill set point of view,
engineering and sales go in opposite
directions.
But really bringing those two kind of uh
backgrounds together into one set of
skills, that is that is the master's
class.
>> Exactly.
Yeah.
>> Amazing. I love this episode.
Thank you very much, Peter, for coming.
We Now we know that many things are
keeping you awake.
>> [laughter]
>> And and and and you don't have much
time, but we could uh make it today.
Thank you for sharing your knowledge,
your experience.
>> And next we will see you in our forum on
3rd of June.
>> Yeah, thanks a lot for the for the
invitation for today. Thanks a lot for
the invitation to the forum. Super
looking forward uh
meeting you guys again there.
>> Amazing. So now you know who is going to
be in the panel, an expert. Uh so, thank
you for watching the episode until the
end and keep tuned [music] for next
interviews here in the daily bridge.
Ciao, ciao, ciao.

From Waste Heat to City Heat: Data Centers, District Energy & AI | Peter Ott, Danfoss | S2E16

The barrier to data-centre heat recovery is contractual, not technical

Unbalanced networks are what force fossil backup back on

AI load forecasting is only usable when physics checks it

Waste heat is an energy-security argument, not only a climate one

Staffing and legislation outrank hardware as roadblocks