Article

As data centre capacity increases, energy storage is seen as essential for addressing power supply challenges. Developers are required to secure permits for substations to support large data centres, with demands ranging from 100MW to over 1GW.

Renewable energy combined with storage is the fastest method for new power generation in the US, particularly for data centres with fluctuating power demands, such as those for AI workloads. Battery energy storage systems (BESS) are evaluated for their potential to manage these demands, although concerns remain about their reliability in maintaining 99.999% uptime.

Developers are exploring revenue models, including merchant strategies, but recent mild weather has affected revenue opportunities in markets like Texas' ERCOT. Lenders are cautious, requiring contracts for energy outputs before financing, yet there is an expectation for innovative solutions that balance contracts with merchant exposure to secure revenue.