Waste-Heat-Driven Atmospheric Water Harvesting (AWH)

Business Targets and Business Model

Business model and target value chain position

K51 AG operates datacenter containers as fossil-free heating systems for commercial greenhouses. The company's infrastructure is deployed directly at agricultural sites, where computing hardware generates waste heat that replaces fossil fuels for greenhouse climate control.

K51's infrastructure operates on a dual-track architecture:

Track 1 — Standard Compute (900 kW): Heating only.
Standard compute hardware (e.g. ASIC miners) generates waste heat delivered to the greenhouse at CHF 0.08/kWh. This track operates seasonally (~5'000 h/year, heating season only) with interruptible batch workloads at CHF 0.10/kWh compute revenue. This is K51's existing, proven model.

Track 2 — High-Performance Compute (100 kW): Water production + dehumidification.
High-performance compute hardware (e.g. GPUs) generates waste heat that feeds directly into a sorption-based Atmospheric Water Harvesting (AWH) system. Because the AWH unit continuously consumes this heat — for water production in summer and dehumidification in winter — this track operates year-round (8'760 h/year), independent of the greenhouse heating curve. Year-round operation enables SLA-grade compute contracts at CHF 0.80/kWh. This is the track that the Innosuisse project enables.

The proposed Innosuisse project adds a third value layer: waste-heat-driven water production and dehumidification through Atmospheric Water Harvesting (AWH) based on sorbent technology developed at ETH Zurich.

This transforms K51's business model from a dual-revenue system (compute + heat) to a triple-revenue system (compute + heat + water/dehumidification), fundamentally improving the economic viability and year-round operability of the infrastructure.

The research foundation is provided by Empa (Urban Energy Systems Lab), which will validate system performance, energy balances, and integration parameters under controlled and real-world conditions. The sorbent technology is developed by the Solabs team (ETH Zurich), who bring deep expertise in thermochemical absorption systems. K51 acts as the implementation partner, providing real datacenter-greenhouse infrastructure, operational know-how, and the commercial pathway to market.

Commercialization structure — dual-track model

A purpose-built spin-off company ("NewCo") is envisaged as the primary commercialization vehicle for AWH technology in the global datacenter market. NewCo would develop, manufacture, and license AWH hardware modules and datacenter integration interfaces to datacenter operators and infrastructure providers worldwide, targeting the USD 15–20 billion datacenter chiller-replacement market as the principal long-term revenue opportunity.

This creates a clear and complementary division of commercialization responsibility: NewCo addresses the broader standalone datacenter market globally, while K51 retains exclusive operational rights for greenhouse-integrated AWH deployments in Switzerland and selected European markets — allowing both entities to focus on the segments where each has the strongest operational and commercial advantage.

Customer issues, pain points, and social challenges

Pain points of Swiss greenhouse operators

Swiss greenhouse operators face a convergence of economic and regulatory pressures that fundamentally threaten their business model:

Mandatory decarbonization. Major Swiss retailers (Migros, Coop) increasingly require their agricultural suppliers to eliminate fossil fuel use. Erdgas (natural gas), historically the dominant heating source for greenhouses, is becoming a non-option. Operators must find fossil-free heating alternatives or risk losing their primary sales channels.

High energy costs for dehumidification. Greenhouse crops continuously release moisture. The standard practice for humidity control is "dry heating" combined with roof venting — heating the air to absorb moisture, then venting the warm, moist air outside. This process wastes up to 30–40% of total heating energy and causes significant CO₂ losses, which must be compensated by purchasing additional CO₂. In Switzerland, CO₂ emissions from greenhouses are increasingly regulated, making CO₂-neutral climate control economically critical.

Increasing water scarcity. While Switzerland is not traditionally considered water-stressed, seasonal droughts are increasing, particularly during summer months. Greenhouse irrigation demands are substantial, and on-site water production represents both an economic advantage and a resilience factor.

No integrated solution available. Greenhouse operators today must procure heating, dehumidification, and water separately from different providers or systems, each with its own cost structure. No commercially available system delivers all three services from a single waste-heat source.

Pain points of K51 (implementation partner)

K51's current business model faces a structural constraint that limits profitability and hardware choices:

Seasonal operation only. Under Swiss zoning law (RPG), datacenter infrastructure in agricultural zones must provide a direct agricultural benefit. Since K51's primary service is heat delivery, computing operations are strictly heat-driven — the datacenter runs only when the greenhouse requires heat. This limits annual operating hours to approximately 4'500–6'000 hours (heating season only), with no operations during summer.

Low-value computing hardware. Because uptime cannot be guaranteed year-round, K51 cannot offer Service Level Agreements (SLAs) required by high-value computing customers (AI inference, rendering, scientific computing). The company is limited to standard, interruptible workloads that generate only approximately CHF 0.10 per kWh of electrical input — barely covering operating costs.

Marginal profitability. With current unit economics (see financial plan below), a 1 MW installation generates a Free Cashflow of only approximately CHF 30'000 per year — insufficient for meaningful reinvestment or risk buffering.

The core problem is not heat — it is the inability to operate year-round. K51 needs a legitimate, regulation-compliant agricultural service that requires waste heat during summer months. AWH-based water production and dehumidification is precisely this service.

Pain points of datacenter operators (core market)

Datacenter operators represent the long-term addressable market for the AWH technology developed in this project. Their structural pain points drive demand for precisely the capability that waste-heat-driven AWH provides:

High and rising electricity costs. Electricity and cooling represent the dominant share of datacenter operating expenses, and costs continue to increase as AI-driven workloads push computing density to new levels. Any solution that assigns secondary economic value to electricity already consumed for computing — such as water production — directly reduces effective energy cost per useful output.

Cooling and thermal management limitations. High-density compute systems increasingly exceed the thermal management capabilities of conventional cooling architectures (air cooling, standard water chillers), leading to higher CAPEX, higher OPEX, and elevated operational risk. Liquid-cooled waste-heat recovery systems are urgently needed at scale.

Regulatory pressure on energy and water. Datacenters face tightening requirements on energy efficiency (PUE targets), water use (WUE/WPF targets), waste heat reuse mandates, and environmental reporting obligations. Non-compliance threatens site approvals and operational licenses in an environment where new capacity is critically needed.

Water scarcity as expansion constraint. Many energy-efficient cooling approaches — including evaporative cooling towers — rely on large quantities of water. In water-stressed regions (Southern Europe, Middle East, parts of the US), this creates a critical bottleneck for expansion and exposes operators to regulatory and reputational risk.

Site limitations and community opposition. Datacenters are frequently denied permits due to high energy demand, water consumption, waste heat discharge, and the absence of tangible local benefit. Converting cooling infrastructure into a locally beneficial, water-producing system directly addresses this barrier and improves community acceptance.

By integrating an AWH unit into the cooling architecture, datacenter operators can convert waste heat into useful water as a by-product of normal operations — reducing operating costs, generating an additional revenue stream, and fundamentally improving their regulatory and community acceptance profile.

Differentiation and Unique Selling Proposition (USP)

K51's USP is not the AWH technology itself, but the system-level integration of computing, heating, dehumidification, and water production into a single infrastructure that serves two customers simultaneously:

1. "Three-in-one" infrastructure for the farmer. A single K51 installation replaces the greenhouse operator's heating system, dehumidification system, and part of the water supply. No other provider offers all three services from waste heat.

2. Year-round datacenter operation in agricultural zones. By adding AWH, K51 transforms seasonal heating infrastructure into permanent agricultural infrastructure (heating in winter, water production and dehumidification in summer), enabling continuous operation within the existing regulatory framework.

3. High-value computing through guaranteed uptime. Year-round operation enables K51 to deploy SLA-grade compute infrastructure with guaranteed availability, unlocking compute revenues of CHF 0.80/kWh instead of CHF 0.10/kWh — an 8× improvement per kilowatt-hour.

4. Shared-cost economics. The AWH unit serves two beneficiaries (datacenter cooling + agricultural water/dehumidification), allowing costs to be shared. This creates economics that neither standalone datacenter cooling nor standalone agricultural dehumidification can achieve independently.

5. Proprietary integration know-how. K51 has operational experience integrating liquid-cooled computing hardware into agricultural heating systems. The AWH integration adds a new layer of system complexity that represents a significant barrier to entry for competitors.

Market size and addressable market

Swiss greenhouse market (beachhead)

• Total Swiss greenhouse area requiring climate control: approximately 470 hectares
• Estimated energy demand for heating and dehumidification: approximately 1'200 GWh/year
• Greenhouse operators under active decarbonization pressure from retail customers: growing rapidly
• Realistic serviceable addressable market for K51 (5-year horizon): 20–30 installations (20–30 MW total capacity), based on existing customer relationships and geographic proximity to grid infrastructure
• Average revenue per installation: approximately CHF 1.5 million/year (compute + heat + water)
• SAM (5 years): CHF 30–45 million annual revenue potential

European greenhouse market (medium-term)

• K51 is actively expanding into France (Nantes region), with 4 x 1 MW installations planned for 2026
• The Netherlands, Germany, and Austria represent additional target markets
• European greenhouse area under glass: approximately 45'000 hectares
• AWH-equipped K51 systems offer a compelling value proposition in regions with high energy costs and decarbonization mandates

Datacenter cooling market (long-term, via NewCo spin-off)

• Global datacenter cooling and chiller infrastructure market: estimated at USD 15–20 billion (2025), growing at 12–15% CAGR driven by AI infrastructure buildout, rising compute density, and increasing regulatory pressure on water use and heat rejection
• This market is not K51's direct operational target, but represents the principal long-term commercialization path for the AWH technology through the envisaged NewCo spin-off
• The greenhouse beachhead serves as the validated technical and commercial foundation for this scale-up; performance data from Imhof Bio and subsequent Swiss/European installations will directly underpin NewCo's go-to-market in the datacenter sector

Market position and competitors

Greenhouse heating

K51's primary competitors for greenhouse heating are:

• Fossil fuel systems (natural gas, oil): dominant but increasingly non-compliant with retailer sustainability mandates
• Heat pumps: high CAPEX and electricity demand; do not provide dehumidification or water
• District heating / waste heat from industry: limited availability and geographic constraints
• Biomass: available but increasingly constrained by feedstock costs and air quality regulation

K51 is unique in providing fossil-free heat at a fixed price below natural gas (CHF 0.08/kWh including hardware allocation vs. CHF 0.08–0.10/kWh for natural gas), while simultaneously generating computing revenue that subsidizes the heat price.

Greenhouse dehumidification

Current dehumidification approaches:

• Venting + dry heating: dominant, but wastes 30–40% of heating energy and causes CO₂ losses
• Mechanical condensation (chillers): effective but requires significant electrical input (high OPEX)
• Desiccant-based systems: exist in laboratory settings but are not commercially deployed at greenhouse scale

The proposed AWH system is the only solution that provides heat-driven dehumidification without additional electrical input, using datacenter waste heat as the sole energy source.

Atmospheric Water Harvesting

Existing AWH companies (Genesis Systems, Uravu Labs) operate standalone, electrically powered units for drinking water production. None are designed for integration with datacenter thermal systems, and none offer combined dehumidification + water production from waste heat.

Competitive advantage

• Full IP ownership: All intellectual property generated through the Innosuisse project belongs exclusively to K51 AG (confirmed and agreed with Empa). This includes integration know-how, system design, operational data, and process innovations. Pre-existing IP (sorbent technology from Solabs/ETH) is regulated separately between K51 and Solabs, outside the Innosuisse framework. Solabs retains usage rights for the sorbent technology outside greenhouse applications; K51 has exclusive rights for greenhouse-integrated deployments. This separation is clean and does not create conflicts. K51 controls the commercialization path without licensing dependencies.
• Operational infrastructure: K51 has existing greenhouse-coupled datacenter installations with validated thermal integration (2 x 1 MW at Imhof Bio, Schwerzenbach)
• ETH-origin sorbent technology: eutonic multi-salt solutions developed by the Solabs team offer superior cost-performance compared to MOF-based or single-salt AWH systems
• Empa validation: research partnership with Switzerland's leading materials and energy research laboratory provides scientific credibility and access to advanced measurement infrastructure
• Regulatory positioning: K51's "digital boiler" concept is already accepted by Swiss planning authorities; AWH strengthens the agricultural justification and reduces regulatory risk
• First-mover advantage: K51 is the first company worldwide to combine datacenter waste heat, greenhouse heating, dehumidification, and water production in a single integrated system. No comparable competitor exists in any market.
• Speed to market: Lab phase already completed (2025). With Innosuisse funding, K51 can move directly to field deployment — 12–18 months ahead of any competitor starting from scratch

Revenue streams

K51 generates revenue from three independent streams per installation:

1. Compute Revenue

• Standard Compute (interruptible, batch workloads): CHF 0.10/kWh, seasonal (5'000 h/year)
• SLA Compute (AI inference, rendering, scientific computing): CHF 0.80–1.20/kWh, year-round with AWH (8'760 h/year)
• SLA-grade compute at premium rates is only viable with AWH-enabled year-round operation

2. Heat Revenue

• Fixed-price fossil-free heat delivery: CHF 0.08/kWh (including CHF 0.02 hardware allocation)
• Governed by a long-term energy supply contract with the greenhouse operator
• Priced below natural gas to ensure competitiveness and willingness to pay

3. Water & Dehumidification Revenue (new, enabled by AWH)

• On-site water production from atmospheric humidity: CHF 5.00/m³
• Dehumidification as an integrated service (included in water contract)
• The greenhouse operator defines the desired water/dehumidification capacity based on their needs

Compute Investment Logic — The Stepped Leverage of AWH

The economic case for high-end compute hardware investment is directly linked to guaranteed annual operating hours. Higher uptime justifies higher-value hardware, which in turn generates higher compute revenue per kWh. All compute hardware must meet K51's thermal integration requirements: liquid cooling, defined supply/return temperatures, and compatibility with the greenhouse heat delivery system.

The high-end compute hardware investment for the top tier (approximately CHF 2.5 million for 100 kW capacity) is financed externally through K51's Alpha infrastructure investment programme, not through the Innosuisse project budget. The Innosuisse project creates the precondition (validated sorption technology + regulatory approval for year-round operation) that makes this external investment viable.

Willingness to pay

Heat: Swiss greenhouse operators currently pay CHF 0.08–0.10/kWh for natural gas. K51's price of CHF 0.08/kWh for fossil-free heat is competitive and eliminates decarbonization risk. Willingness to pay is validated through existing contracts.

Water: Municipal water in Switzerland costs CHF 1.50–3.00/m³. K51's price of CHF 5.00/m³ is above municipal water rates but includes:

• On-site production (no transport, no infrastructure dependency)
• Distilled quality (suitable for sensitive crops)
• Integrated dehumidification (saves CHF 0.02–0.03/kWh in reduced venting losses)
• Summer availability when external water may be restricted

When accounting for the combined value of water + dehumidification + reduced CO₂ loss + reduced heating energy, the effective cost to the farmer is significantly below the standalone cost of each service procured separately.

Profit-sharing: In addition to the fixed-price heat and water contracts, K51 offers greenhouse operators a 30% share of the Free Cashflow generated on their site. This profit-sharing model aligns incentives and compensates the farmer for hosting the infrastructure.

In Switzerland, the AWH-enabled model introduces a new water delivery contract alongside the existing heat contract. The SLA compute revenues and water revenues flow through this water contract. The 30% FCF share to the farmer comes from this combined water/compute contract.

In France, K51 offers a 50% FCF split to early adopters ("Founder's Circle") under heat-only contracts. The Swiss and French models are structurally different — the Swiss model includes the AWH/water component, while the French model is heat-only — and are not directly comparable.

Cost structure and required resources

Per 1 MW installation

Capital expenditure (one-time):

Phase 1 — Innosuisse project:

Phase 2 — Commercial rollout (post-Innosuisse, only if Phase 1 succeeds):

Annual operating costs (steady state, Year 3+):

Innosuisse project costs

The total project budget for the Innosuisse innovation project is estimated at approximately CHF 820'000 over 24 months, covering:

• Personnel (research assistant, partial PhD involvement, Master's students): ~1.5 FTE
• Empa prototype validation (building on the 10 kW lab prototype already completed at Sol Labs/ETH in 2025)
• Containerized field pilot (~200 kW) for deployment at Imhof Bio, Schwerzenbach
• Water quality validation and compliance testing (regulatory approval for water production)
• System integration engineering and data analysis

Budget allocation between partners is subject to finalization (see Open Items).

Revenue and profitability development (5-year plan)

Scenario A: WITHOUT AWH / WITHOUT Innosuisse funding (baseline)

Per 1 MW installation, all values in CHF

Conclusion: Without AWH, K51's greenhouse-coupled datacenter model operates at near break-even. The business is sustainable but generates insufficient cashflow for meaningful growth, reinvestment, or risk buffering.

Scenario B: WITH AWH / WITH Innosuisse funding

Per 1 MW installation, all values in CHF

Capital expenditure:

Phase 1 — Innosuisse project:

Phase 2 — Commercial rollout (post-Innosuisse, only if Phase 1 succeeds):

K51 net cashflow after sorption CAPEX (5 years cumulative): CHF 1'270'847

NPV comparison

Without Innosuisse funding

Without public co-funding, development would proceed at a slower pace:

• The Empa laboratory validation phase would be delayed by 12–18 months due to the need to secure private R&D financing
• K51 would bear the full R&D risk, reducing willingness to invest in the compute hardware upgrade before technology validation is complete
• Time-to-market for the first commercial installation would shift from Q1 2027 to late 2028 or early 2029
• The cumulative 5-year NPV impact of this delay is estimated at CHF 350'000–500'000 in foregone K51 cashflow

Innosuisse funding is therefore critical not only for reducing financial risk, but for accelerating market entry by enabling parallel development of the laboratory prototype and commercial deployment.

Revenue generation and self-sustainability

K51 is an established, revenue-generating company. The AWH integration does not require K51 to find a new business model — it enhances an existing, proven model.

Self-sustainability is achieved through:

1. Existing heat contracts provide stable baseline revenue from day one
2. Compute revenue scales with operational hours — AWH enables the transition from seasonal to year-round operation
3. Water contracts add a third revenue stream with minimal incremental cost
4. Profit-sharing model aligns farmer incentives without requiring upfront subsidies

After the Innosuisse project concludes (end of Year 2), K51 operates the AWH-integrated system commercially without further public funding.

Potential Customers and How They Are Reached

Customer model

B2B. K51 sells infrastructure services (heat, water, dehumidification) directly to commercial greenhouse operators under long-term contracts.

Target customers

Primary: Swiss greenhouse operators under decarbonization pressure

• Commercial vegetable and herb producers supplying Migros, Coop, and other major retailers
• Operators with existing natural gas heating systems facing replacement
• Typical greenhouse size: 2–10 hectares, energy demand 200–500 kWh/m²/year
• First customer: Imhof Bio, Schwerzenbach — existing K51 installation (2 x 1 MW), organic vegetable production

Secondary: European greenhouse operators (France, Netherlands, Germany)

• K51 is actively expanding into France (Nantes region, 4 x 1 MW planned for 2026)
• AWH adds significant value to the French market proposition, where summer dehumidification and water scarcity are more acute than in Switzerland

Market access and marketing approach

K51's market access is relationship-driven and infrastructure-based, not mass-market:

1. Existing customer base. K51 already operates datacenter-greenhouse installations. AWH is offered as an upgrade to existing customers first.
2. Agricultural networks. K51 works with Bio Suisse, Les Maraîchers Nantais (France), and direct contacts with greenhouse operators through industry events.
3. Reference installations. The Innosuisse-funded pilot at Imhof Bio serves as a demonstration site. Validated performance data and farmer testimonials are the most powerful marketing tools in the agricultural sector.
4. Research credibility. The Empa partnership and Innosuisse label provide institutional credibility that accelerates trust-building with conservative agricultural customers.
5. Multiplier partnerships. K51 works with AXPO (Swiss energy utility) for lead generation and site identification, particularly for sites with favorable grid connections.

Implementation plan

Go-to-market strategy and early market traction

Proof of early market traction:

1. Existing installation at Imhof Bio, Schwerzenbach: 2 x 1 MW K51 containers operational, with thermal integration into the greenhouse heating system. This site is confirmed as the location for the AWH field pilot.
2. Active expansion in France: 4 x 1 MW installations planned in Nantes region for 2026, with farmer partnerships established through Les Maraîchers Nantais (Flavie Morin, Directrice).
3. Institutional partnerships: Formal collaboration with Empa (Dr. Binod Koirala, Reto Largo) and Solabs (Fabrice Bagnoud, ETH Zurich environment).
4. Customer demand validated: Greenhouse operators have expressed interest in combined heat + dehumidification solutions. The decarbonization pressure from retail customers (Migros, Coop) creates urgency.
5. MoU signed: A Memorandum of Understanding between K51 and the Solabs technology team governs the collaboration framework, IP principles, and commercialization path.

Energy, Ecological, and Social Relevance

Higher purpose

The project transforms datacenter waste heat — currently the largest source of inefficiency in digital infrastructure — into clean water and climate services for agriculture. It demonstrates that computing and food production can be symbiotic rather than competing uses of energy and land.

Concrete contributions

Energy efficiency and resource optimization

• Waste heat utilization: 100% of datacenter electrical input is converted to useful thermal energy (heating, dehumidification, water production). Conventional datacenters reject this heat to the environment.
• Reduced purchased energy for dehumidification: The AWH system eliminates the need for electrical dehumidification (chillers) or energy-wasteful venting practices in greenhouses.
• Year-round operation: Extending datacenter operation from ~5'000 to ~8'760 hours/year improves the utilization of existing grid infrastructure and electrical connections — a significant efficiency gain at the system level.

Clean water and sanitation

• On-site water production: 1'251 m³ of distilled-quality water per year per 1 MW installation, produced from ambient humidity using only waste heat.
• Reduced pressure on freshwater resources: Particularly relevant during increasingly frequent summer droughts in Switzerland and Southern Europe.
• Water-positive digital infrastructure: The project demonstrates that datacenters can be net producers of water rather than consumers — a paradigm shift with global relevance.

Climate protection

• Fossil fuel replacement: Each K51 installation displaces approximately 500'000 m³ of natural gas per year (equivalent greenhouse heating).
• Reduced CO₂ losses: AWH-based dehumidification eliminates the need for roof venting, retaining CO₂ inside the greenhouse and reducing the need for purchased CO₂ supplementation.
• Decarbonization pathway for agriculture: The project provides a commercially viable alternative to fossil-fuel-based greenhouse climate control, directly supporting Switzerland's climate targets.

Circular economy

• Waste-to-resource conversion: Datacenter waste heat becomes water + climate services. No additional primary energy input required for the AWH process.
• Shared infrastructure: One installation serves two economic actors (datacenter operator + farmer), maximizing resource utilization per unit of infrastructure deployed.

Social acceptance and quality of life

• Improved local acceptance of datacenters: By producing tangible local benefits (heat, water, agricultural support), datacenter infrastructure gains community acceptance rather than opposition.
• Support for resilient food production: Decarbonized, water-secure greenhouse operations contribute to local food sovereignty and supply chain resilience.
• Rural value creation: Datacenter-greenhouse integration creates economic opportunities in agricultural regions that typically do not benefit from digital infrastructure investments.

Benefit for Swiss society and economy

The project creates value at multiple levels:

1. For Swiss agriculture: A commercially viable pathway to decarbonize greenhouse operations while reducing water dependency and energy costs.
2. For Swiss digital infrastructure: A model for deploying computing infrastructure in a socially and environmentally responsible manner, with potential to position Switzerland as a leader in sustainable datacenter design.
3. For Swiss innovation: The project translates ETH-origin research into a commercial product through a Swiss implementation partner, with potential for a technology spin-off that addresses global markets.
4. For Swiss energy policy: Demonstrates that waste heat utilization, renewable water production, and efficient land use can be achieved simultaneously through system-level innovation.

The investment is justified by the combination of strong commercial viability (see financial plan), significant environmental benefit, and the creation of exportable know-how through the Empa–ETH–K51 collaboration.

Open Items (to be finalized)