Strengthening Data Center ROI with Battery Storage
Data center energy consumption could double (or triple) by 2028, according to a U.S. Department of Energy report published in 2024. For developers of data center projects, this trend represents a viable opportunity—one that requires careful planning and, of course, a reliable stream of energy.
Leveraging battery storage can be a smart way to keep energy flowing and, ultimately, enable healthier returns on investment.
Challenges Facing Data Center Developers
Data centers involve massive capital expenditures that are usually measured in billions (not millions) of dollars. Negative sentiment can bubble up quickly within a community, turning an ideal site into a dead-end street. Zoning and permitting setbacks create additional frustration and construction delays. All the while, demand for data keeps increasing—leaving developers in a very difficult spot.
Energy supply chain issues pose another real risk to data center projects. As pointed out in the U.S. Department of Energy’s grid modernization resource, “Our electric infrastructure is aging and it is being pushed to do more than it was originally designed to do.” Data centers are a prime example of pushing the grid to “do more.” That’s why some developers are exploring behind-the-meter generation techniques, including on-site solar, wind, and even small modular reactors (SMRs).
Battery Storage & Data Centers
Powering data centers through an “all of the above” energy strategy makes a lot of sense, especially when paired with utility-scale battery storage. Here’s why.
Accelerated connectivity: Connecting a data center to the grid can require more time than what is required during construction. Battery storage opens the door to “bring your own capacity” (BYOC) arrangements, which can alleviate interconnection issues.
Downtime avoidance: Data center uptime is key for ensuring healthy customer relationships that deliver predictable revenue. Although behind-the-meter sources can operate independently from the grid, cloudy conditions and low wind speeds limit the immediacy of renewable sources. Battery storage makes it possible to capture excess energy and use it later during periods of peak demand, such as on hot, cloudy days.
Waste reduction: Energy demand rarely aligns perfectly with energy supply. That’s true at a macro level, but it’s also true locally. Wind turbines keep spinning as long as the wind is blowing, which could result in a surplus (and otherwise unusable) supply. Storing excess energy mitigates waste and creates new opportunities for harnessing off-peak, lower-cost energy.
ROI optimization: When used strategically, battery storage gives data centers more options—like adding additional BYOC capacity, capturing affordable energy during periods of lower demand, and making decisions that reduce reliance on an already overworked grid.
Interested in learning about battery storage? Download Trigen’s free whitepaper, “Battery Storage & the Data Center: What Developers Should Know.”