Within the next 3 years, data centers could be taking up 12% of America’s electricity demand.
That’s according to the US Department of Energy, who’s December 2024 report predicted that data centers would require a total power demand of 74-132GW by 2028, thanks to the rise of AI. Less than a decade ago they were only responsible for 1% of demand – and even that was considered high by many.
We’ve previously written about how AI is supercharging the data center construction industry, and as more of these projects come online, there are concerns about the pressure this will put on the power grid – as well as global emissions targets.
So what makes Battery Energy Storage Systems the answer?
BESS is best
Powering data centers efficiently is a major concern for mission critical developers. While they can and do use power from the grid, many are also being designed with “captive” sources, such as their own solar panels, wind turbines, gas turbines or even small nuclear reactors.
There are benefits and drawbacks of each: renewables have a high capex cost to generate enough for a hyperscale data center, and limit expansion prospects without further installation. While power sourcing from the grid risks long outages if that supply is overwhelmed or power is impacted by transmission line losses.
Hybrid solutions manage the best of both, but even they can be faced with fluctuations, which is why effective BESS infrastructure is essential for maintaining a steady flow of power that can keep these facilities fully operational 24/7.
A study from Duke University in February 2025 found that 100GW of large loads could be added to the grid with minimal impact, as long as those loads are flexible. Flexibility, however, means power is curtailed at peak times to the facilities. BESS at the interconnection point could be a buffer to this, taking on more energy when possible, and releasing it at peak times to relieve pressure on the grid – maintaining a steady rate for the data center while minimizing disruption elsewhere.
There’s also the cost and supply benefits. Gas, wind and solar projects are all needed to generate the additional power required by the increase in data centers – but all have long completion timescales, particularly when impacted by supply chain issues and changing legislation. Batteries, however, are faster to get to market quickly, are experiencing a fall in manufacturing costs, and still benefit from tax credits into the early 2030s, having been less affected by the One Big Beautiful Bill Act as other energy projects.
When looked at as a solution for managing power demand and delivering consistency, BESS have a lot of benefits that either fossil fuels or renewables alone can’t deliver.
What does this mean for the BESS market?
Powering the AI revolution is a significant challenge that’s only going to grow in scale and complexity as demand increases and new data center plans develop. Developers are recognizing the essential nature of BESS projects in conjunction with both data center operations and power and renewables projects.
Analysis from Rystad suggests that US grid-scale BESS market has grown 60% in 2024, and predicts that this rate of expansion will continue for the next five to seven years thanks to lower manufacturing costs and ongoing design improvement.
Texas became the largest BESS market last year, with around 4GW of installation each year and a BESS inventory of seven GW. California has a similar growth rate of installation, with Arizona also driving significant development.
Demand is expected to continue growing, with MarketsandMarkets anticipating the US BESS market to grow from $2.13 billion in 2024 to $7.02 billion by 2029.
The scale of this growth and increased dependency of battery storage solutions, is going to create more and more scarcity for experts who can deliver advanced utility-scale BESS projects. This makes it important to work with trusted suppliers who understand project needs and deliver the right solutions to achieve operational goals.
Coalesce Management Consulting’s US BESS team partner with leading developers who are delivering ambitious storage solutions to power data centers across America.
Our consultants deliver expertise across the full project lifecycle, from feasibility and front-end engineering design through construction, commissioning and installation. Our team can advise on overcoming complexity, minimizing risks and achieving faster results in the face of any project challenges.
Partner with CMC today to benefit from the flexible, fast service delivery provided by our BESS experts. Get in touch with our specialist team to learn more.