OSLO (Reuters). Finnish utility Fortum announced Thursday that it would use the waste heat generated by two new Microsoft (NASDAQ) data centers to heat homes and businesses around Helsinki and reduce carbon emissions.

Microsoft announced simultaneously plans to construct data centres. They will use renewable energy and be located in areas that allow heat recovery from computer server cooling.

Finland is a big user of district heating. The heat comes from underground pipes pre-insulated with insulation.

Fortum has a network of underground pipes that runs 900 kms, serving over 250,000 people in Helsinki. The data centers will provide 40% of the heat supply system, according to the firms.

Fortum stated that its heat capture investment from data centers was valued at 200 million euro ($221 million). This would reduce CO2 emissions by around 400,000 tonnes annually.

Microsoft did not say how much they would spend on the centres.

The company estimated, however, that initially it would require 400-500 gigawatthours (GWh), of renewable electricity per year. It said this was comparable to the scope of other local industries like a paper or pulp plant.

Microsoft intends to purchase the electricity using one or more long term power purchasing agreements (PPA), though no supplier has yet been identified, according to Reuters.

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