Data Center Energy Storage Development Seizes Opportunity
Data center energy storage is entering a promising phase of development. Recently, eight departments, including the Ministry of Industry and Information Technology, issued the “Action Plan for High-Quality Development of New Energy Storage Manufacturing Industry.” This plan aims to promote the integration of new energy storage systems for users with high reliability and energy quality requirements, such as data centers, intelligent computing centers, communication base stations, industrial parks, commercial enterprises, and highway service areas.
As the digital economy continues to thrive, data centers, which serve as core infrastructure, are experiencing a steady increase in both number and scale, resulting in a sharp rise in energy consumption. Industry experts indicate that the introduction of new energy storage technologies will significantly enhance the reliability of power supply and energy quality for data centers. This will be a crucial means to optimize energy supply, increase energy efficiency, reduce energy consumption, and lower carbon emissions.
Rising Demand for Storage Integration
In recent years, the combination of data centers and energy storage has garnered significant attention within the industry, with numerous projects and tenders being announced. In February, China Telecom (Anhui) announced the shortlisted candidates for its intelligent computing center energy storage project (Phase 1), which has a planned capacity of 25MW/200MWh. The estimated procurement amount is approximately 373.99 million yuan.
In the same month, Nandu Power won a bid for a data center lithium battery equipment procurement project with a major global software company, amounting to about 120 million yuan. In January, Nandu Power also secured a bid for a high-voltage lithium battery project for 2025 with GDS Services. According to GDS’s strategic cooperation requirements, Nandu Power must allocate no less than 1.2GW of production capacity for this project in 2025.
In November of last year, Gansu Energy announced that it had received a letter from its controlling shareholder, Gansu Power Investment Group Co., Ltd., regarding the initiation of the Qingyang Data Center Cluster Green Electricity Aggregation Project. The project will feature a total installed capacity of 2 million kilowatts of new energy, including 1.5 million kilowatts from wind and 500,000 kilowatts from photovoltaic sources, with energy storage configured at 10% for two hours.
Professor Sun Chuanwang from the China Energy Economics Research Center at Xiamen University noted in an interview that China is currently at a pivotal moment for digital energy storage layout and construction. By the end of 2023, the total electricity consumption of China’s computing centers is projected to be around 150 billion kilowatt-hours, accounting for over half of the growth rate of total electricity consumption for the year. The rapid increase in data center electricity loads is expected to significantly boost the demand for energy storage solutions, creating substantial growth potential for data center storage.
Traditionally, data centers relied on grid electricity, diesel generators, and lead-acid batteries as backup power sources. However, the shift towards green and low-carbon development has led to the emergence of projects utilizing “photovoltaics + energy storage” to power data centers, according to Long Zhiqiang, a senior researcher at Xinluo Information.
According to the High-tech Industry Research Institute (GGII), global data center energy storage battery shipments are expected to reach 15GWh, 35GWh, 69GWh, 110GWh, 200GWh, and 300GWh from 2025 to 2030, respectively.
Ensuring Stable Power Supply
The role of energy storage in data centers is becoming increasingly critical. Energy storage systems can provide backup power during grid failures or outages and serve as a vital component of the primary energy supply alongside wind and solar energy. Professor Sun highlighted that energy storage integration can significantly enhance the stability of power supply in data centers and facilitate the transition to a greener, low-carbon energy structure.
Energy storage systems can fulfill the daily electricity needs of data centers while acting as backup power in case of grid outages. Additionally, the deployment of energy storage devices can improve the flexibility of energy usage in data centers. Long added that, with the push for green and low-carbon development, the high energy consumption of data centers necessitates a shift towards greener energy solutions, utilizing energy storage to balance peak loads and reduce electricity costs.
Recently, Defang Nano also acknowledged on an interactive platform that data centers, as core infrastructure of the digital economy, have increasingly growing energy demands. Energy storage systems can ensure stable operations, optimize energy utilization, reduce operational costs, and mitigate the impact of sudden power failures, making them crucial for the stable, efficient, and green development of data centers.
A significant point of interest is the rapid global development of AI technology. How AI will influence energy storage in data centers in the future remains a topic of discussion. Experts believe that the application of AI technology will impose higher demands on computing power, leading to the expansion of data center scales and increasing the overall demand for backup power systems. Furthermore, it will enhance the safety and intelligence of energy storage systems.
AI can monitor the temperature of battery cells in real-time and assess their consistency, helping to prevent safety incidents. In scenarios like data centers, AI can monitor the status of battery cells, predict potential safety hazards, and implement preventive measures to mitigate risks.
Increasing Financial Support
Overall, the rapid advancements in data center energy storage technology provide robust support for improving energy efficiency and ensuring data security. However, it is critical to note that data centers have very high safety requirements. As demand continues to grow, ensuring safe operations is paramount.
As the current mainstream energy storage technology, lithium batteries face scrutiny regarding safety issues such as thermal runaway and fire hazards. Professor Sun emphasized the need to enhance the safety regulatory framework for data centers while accelerating the research and development of safer new materials, such as solid-state electrolytes and flame-retardant electrolytes. He also suggested implementing a graded certification system for battery material safety performance to guide the industry towards high-temperature-resistant and low-flammability technologies, thereby reducing the risk of thermal runaway from the outset.
Historically, data centers predominantly used lead-acid batteries for backup systems, which have lower energy density and occupy more space. However, with ongoing technological advancements, lithium batteries, which offer high energy density, high discharge rates, and compact size, are gradually gaining traction in data center backup systems. Long noted that lead-acid batteries previously accounted for about 90% to 95% of backup systems, with lithium batteries making up only a small fraction. The future development potential for lithium batteries in backup systems is substantial, especially with the widespread adoption of lithium energy storage technology, particularly lithium iron phosphate, which is gradually enhancing safety.
In addition to safety, cost remains a critical consideration for data centers when adopting lithium batteries. Currently, lithium battery costs are relatively low, but performance aspects like discharge rates still require more case studies and data support. Overall, the penetration rate of lithium battery storage technology in data centers remains relatively low, with few available case studies. Further promotion and data accumulation are necessary to better optimize and lay the groundwork for future projects.
Professor Sun suggested increasing financial support through comprehensive use of tax incentives, land subsidies, and project grants. He advocated for innovative, multi-faceted green financial products that support data center storage development and facilitate data center enterprises in accessing multi-tiered capital markets for large-scale storage financing.
