BESS in data centers: use cases and technologies

As power demand for new data centers grows to hundreds of megawatts, battery energy storage systems (BESS) are being proposed to manage power quality and meet key reliability challenges. They can be used alongside large on-site and grid-based power generation systems, as well as to control voltage and frequency variability generated by new AI infrastructure. New battery technologies have emerged, but lithium-ion remains the only widely deployed option, used primarily for UPS systems and short-duration renewable shifting. For other technologies, uncertain economics, varying discharge durations and response capabilities, and their largely pre-commercial status currently constrain BESS adoption.

KEY POINTS

• Battery energy storage systems (BESS) show strong potential for data center power optimization, but deployment is still nascent.
• Battery storage can support four key use cases — UPS, demand response/peak shaving, renewable energy shifting and power balancing — but applications beyond UPS and 2- to 4-hour renewable energy time-shifting remain largely limited to pilot projects and early-stage implementations.
• No single battery technology fully meets data center requirements today. Multiple technologies — lithium-ion, sodium-ion, flow batteries and emerging long-duration chemistries — offer distinct strengths across duration, response time and cost. However, only lithium-ion has proven commercial scale, while others face gaps in economics, maturity and manufacturing capacity.
• BESS can enhance grid support, improve power quality and enable greater use of carbon-free energy. Current technical and economic limitations mean it will complement — rather than displace — generators and grid infrastructure in large-scale deployments.