A mini revolution in eco-friendly computing is taking place in the depths of the 19th-century Orthodox Uspenski Cathedral in downtown Helsinki.

The Finnish IT company Academica has installed a new 2MW database server centre in an empty second world war bomb shelter meant to protect city officials in the event of a Russian attack. Water warmed while cooling the servers will go on to provide heat for 500 homes or 1,000 flats in a city that often suffers winters of -20C. After the heat is extracted, the water will be recycled back to cool the servers again.

"There have been smaller implementations of similar systems," says Pietari Päivänen, head of sales at Academica. "Data centres being used to heat parking lots. No one has conducted the heat towards a central heating system however."

Around the world, vast and fast-rising amounts of information and data are being stored online, creating a huge demand for affordable data centres. But the servers consume vast amounts of energy, raising concerns about the greenhouse gas emissions produced. About 2% of the total electricity used in Britain powers data centres, making them expensive to operate and a significant factor in the causes of climate change.

Cooling the servers is the most expensive and energy intensive part of maintaining a data centre and Academica are tackling this challenge by making use of the heat extracted. Together with Helsingin Energia, an energy company owned by the city of Helsinki, they have designed a system to use the chilly waters of the Baltic sea to cool the servers. The heat is transferred by a separate pipe system of desalinated water and then sent through the city's vast underground tunnel network to the district heating system, for which the tunnels were originally built.

The data centre began operation in the last few weeks and immediately Helsinki was able to lower the output from its coal-fired power stations, reducing pollution and saving money. Expectations for the future are high, and Academica has already been contracted to build a second data centre – ten times larger – to provide heat for the city.

"In the US for example the access to energy is cheaper," says Juha Sipilä, an engineer at Helsingin Energia and project manager. "For us in Finland fuel and energy has always been quite expensive. It has forced us to look for some solutions to cut down on our energy consumption." The use of the underground bomb shelter has another perk, said Sipilä: "The servers will be very safe."

Providing a green data centre is also expected to save Academica about £140,000 a year.

"There is the saving cost," Päivänen says. "There is not any conflict between those areas. People believed a couple of years ago that being green meant higher costs. This is not necessarily the way anymore."

The new data centre in Helsinki comes at the same time as Google is building their own database server centre in Finland, in the town of Hamina about 93 miles from Helsinki.

Set to begin operation this year, the £180m data centre will use water from the Baltic Sea to cool their servers. Two of Google's 40 plus data centres run on 100% recycled water. This year Google expects recycled water to provide 80% of its total data centre water consumption.