The scramble to find enough power for artificial intelligence has data center operators looking for any solution. An unexpected one taking root pairs batteries — long seen as a key to adding more renewables — with fossil fuels.
BloombergNEF has tracked 4.9 gigawatts of energy storage announcements that are co-located with on-site fossil fuel generation at data centers. That’s about 32% of announced global on-site data center battery capacity.
The sites include some of the largest AI data center complexes under development, such as Elon Musk’s Colossus supercomputer in Memphis, Tennessee, and the combo has become so popular that companies such as Caterpillar Inc. and GE Vernova Inc. have announced products or partnerships pairing energy storage with gas generation.
Batteries are a linchpin for unlocking solar and wind energy’s full potential by soaking up excess green energy and then discharging it when the wind isn’t blowing or the sun isn’t shining. However, the steep drop in battery costs is now allowing energy-storage technology to be deployed in conjunction with natural gas to provide more reliable power for data centers.
While gas can provide round-the-clock power, not all plants work 24/7. For many behind-the-meter facilities, data centers are choosing gas turbines that run for shorter periods and don’t ramp up quickly enough to meet computing needs. That has hyperscalers turning to batteries, which can rapidly discharge power, to fill these gaps. The batteries also help prevent damage to gas turbines that aren’t designed to be used for frequent ramping cycles.
“I assumed batteries would be a tool for decarbonization,” said Michael Thomas, founder of clean energy research firm Cleanview who has also been tracking the rise of energy storage paired with gas. “What we are learning in this new AI era is that they can also be used as a tool for fossil fuel power because their technological advantages make it possible to build and operate an off-grid power plant.”
While data centers now face an average of four years to get power from the grid, they are turning to gas generators paired with energy storage as a bridge source of energy, said Allison Weis, Wood Mackenzie’s global head of energy storage. As long interconnection queues delay requests for utility-connected power, data center developers are finding it faster to bring their own generation.
Data centers also have sharp demand spikes driven by computing-intensive tasks, such as training models. Batteries paired with gas can help provide power rapidly enough to ensure smooth operations.
Some of the largest US data center projects are deploying batteries alongside gas generators. At xAI’s Colossus facility, rows of Tesla Inc. Megapacks are being installed next to gas turbines as part of a 1.2 gigawatt off-grid power plant that will supply the massive data center. In West Texas, Pacifico Energy’s GW Ranch off-grid data center will have 1.8 gigawatts of battery storage installed next to 7.65 gigawatts of gas-fired power generation.
Williams Cos., a natural gas pipeline operator, plans to install Tesla batteries along with natural gas-fueled power plants its building for several data center projects. “Batteries really help support the turbines and give us the 99.999% reliability,” said Executive Vice President Rob Wingo at the S&P Global Power Markets Conference in Las Vegas last week.
Fluence Energy Inc., a global energy storage provider, is in talks with large natural gas companies to supply batteries that can help get data centers up and running before turbines arrive, said Chief Customer Officer Jeff Monday.
“We are seeing massive demand coming out of the hyperscalers and data center operators,” Monday said, noting that projects pairing batteries with gas generation are part of the fastest-growing part of the company’s energy storage pipeline.
Coupling batteries with natural gas also promises to extend the life and usefulness of fossil fuel plants. That is setting batteries up for a dual role as an enabler to putting more green energy on the grid and delaying the phase-out of fossil fuels.
“There is nothing about batteries that are inherently clean,” said Thomas. “Batteries are just a technology.”