Battery storage firms eye AI demand but face grid, supply hurdles

By Kavya Balaraman

May 18 (Reuters) - Battery retention firms successful the U.S. are seeing surging involvement from power-hungry AI information centers, but lengthy queues to link to the grid and a proviso concatenation heavy babelike connected China are hampering the industry's quality to rapidly scale.

Battery vigor retention systems, ‌which sorb powerfulness erstwhile proviso is abundant and discharge it backmost to the grid erstwhile needed, person been progressively deployed successful renewable-heavy regions similar ‌California, wherever they assistance conscionable request successful the evening, erstwhile star powerfulness starts to wane.

Now, they are emerging arsenic a promising solution for information centers. When installed successful beforehand of the meter, they tin ​smooth powerfulness request and optimize transmission-line capacity. Behind the meter, they tin negociate request spikes, trim powerfulness depletion erstwhile the grid is strained, screen impermanent powerfulness outages and little dependence connected backup diesel generators.

Experts say, however, that the manufacture inactive faces bottlenecks.

"Supply concatenation constraints and interconnection queues are 2 of the astir important barriers," said Harvest-Time Obadire, elder powerfulness and renewables expert with BMI, a portion of Fitch Solutions.

While information centers tin beryllium built successful 18 to 24 months, connecting to the grid tin instrumentality 3 to 7 years ‌in parts of the US, helium added.

POWER DEMAND FROM DATA ⁠CENTERS COULD RISE SHARPLY

Power request from information centers could scope 9% to 17% of U.S. energy proviso by 2030, oregon up to 790 terawatt-hours (TWh), compared with astir 4% today, according to the Electric Power Research Institute.

Meanwhile, the U.S. added a grounds 57.6 GWh of ⁠new artillery vigor retention capableness successful 2025, according to the Solar Energy Industries Association (SEIA), bringing full deployed capableness to 166.1 GWh.

The radical projects that by 2030, yearly artillery retention deployments volition scope 110 GWh, with a important stock driven by information halfway demand.

These systems besides brace good with earthy gas-fired generation, which is emerging arsenic a cardinal solution for energy-intensive information ​centers.

“Batteries ​will beryllium an indispensable assets astatine information centers reliant connected onsite state generation, arsenic state generators ​are not accelerated capable to travel volatile AI information halfway demand,” ‌said Ben Hertz-Shargel, planetary caput of grid translation astatine Wood Mackenzie.

That request is driving a question of deals. Energy retention institution Fluence is engaged successful implicit 30 GWh of information center-related projects globally, with a meaningful information successful the U.S., said CEO Julian Nebreda.

Tesla saw $430 cardinal successful gross past twelvemonth from selling its retention systems to Elon Musk’s xAi, and Calibrant Energy has agreed to supply a 31 MW/62 MWh artillery vigor retention strategy astatine an Aligned information halfway field successful the Pacific Northwest.