A new survey of data center professionals reveals that backup systems aren’t widely trusted, safety is the top priority, and energy storage limitations and sustainability targets are driving change in the industry, among another findings.
ZincFive and Data Center Frontier collaborated to produce the report, 2024 Data Center Energy Storage Industry Insights, offering a look into the current landscape and future trends as predicted by their peers. Featuring contributions from 117 industry professionals worldwide, the report examines the state of data center energy storage, covering usage, perceptions, priorities, challenges, future predictions, and the impact of AI.
Survey demographics
Nearly a quarter (23%) of respondents said that their organization’s primary role was a customer of data center services, while 22% were data center providers. Two in five respondent organizations (39%) had more than 1,000 employees across all locations.
More than half of respondent organizations identified as an enterprise data center (55%) and colocation center (52%). Three in ten (30%) said that their data centers use less than 5 megawatts (MW) across all campuses, while more than a third (36%) are using more than 100 MW with 23% using over 500 MW.
Priorities
When evaluating energy storage solutions, industry professionals prioritize safety (69%) and total cost of ownership (64%), with nickel-zinc (NiZn) emerging as a notable battery chemistry, according to the survey.
Only a third of respondents (34%) said they “completely” trust their existing backup system. Of those remaining two-thirds, more than half (57%) felt that the failure point of their existing backup system was human error, followed by the transfer switch (36%) and generator (24%)
Half of all respondent organizations (51%) were using less than 500 kW uninterruptible power supply (UPS) size while one in ten (11%) were using more than 2 MW as their typical deployment UPS size. More than a third of respondents (37%) were using valve-regulated lead acid (VLRA) cell batteries for centralized UPS energy storage, followed by lithium-ion manganese oxide (LMO) batteries (26%)
Energy storage technology limitations (50%), sustainability targets/mandates (44%) and the transition from centralized to distributed UPS or energy storage (41%) were driving the changes respondents considered for their energy storage technology.
Sustainability
Sustainability was important to 81% of respondents, with many data centers (64%) assessing supply chain sustainability and tackling Scope 3 emissions, ZincFive said.
Additionally, two-thirds (63%) said that their organization’s sustainability programs have resulted in some cost reductions, with one in five (19%) seeing significant cost reductions. Additionally, 26% of respondents expect their runtime to decrease, 38% foresee no change, while the remaining respondents believe it could increase.
Nearly two-thirds of respondents (64%) said that they are assessing the sustainability performance of their supply chain. Two-thirds (63%) said that their organization’s sustainability programs have resulted in some cost reductions, with one in five (19%) seeing “significant” cost reductions. Also, 59% of respondents said they saw “significantly” better product choices or somewhat better product choices after implementing sustainability programs.
Safety
The study highlights that safety is the top priority for data center backup power, with seven in 10 respondents prioritizing the safety of battery chemistry. Cost is also important, with lifetime cost and initial CAPEX closely correlated. Nickel-zinc batteries, along with valve-regulated lead acid (VRLA) and lithium iron phosphate (LFP) batteries, ranked highly for both safety and cost considerations.
Seven in ten respondents (69%) said that the safety of chemistry was a priority (top priority + high priority) when selecting an energy storage solution.
Emerging battery technologies
The study shows that newer battery chemistries are gaining traction, which ZincFive says is driven by the combined set of benefits that data center operators value. When asked what they were not getting out of their current battery backup/energy storage technology, respondents listed the following four top priorities in order of mention frequency: long life, reliability, sustainability, and cost reduction.
Two in three (64%) respondents said the lifetime cost consideration/total cost of ownership was a priority. VRLA cell batteries (64%), LFP batteries (63%), LMO batteries (63%) and Nickel-Zinc batteries (62%) were rated the highest on safety (excellent + very good + good) among battery types. LFP batteries (60%) were rated the highest (excellent + very good + good) based on sustainability followed by VRLA cell batteries (55%).
When it came to cost, VRLA cell batteries (59%) were rated the highest (excellent + very good + good) followed closely by Nickel-Zinc batteries (58%).
The impact of AI
When discussing AI’s impact on power requirements and energy storage technology, respondents highlighted its influence on several areas: dynamic load management, predictive maintenance, intelligent Battery Management Systems (BMS), advancements in battery technology and power density, sustainability, integration with renewable energy, AI-driven cooling solutions, and energy-efficient algorithms, among others.
What’s yet to come?
At least 38 GW of peak demand growth is expected through 2028, driven by the development of data centers and industrial and manufacturing facilities, according to a recent report from Grid Strategies.
The report, The Era of Flat Power Demand is Over, cited forecasts from grid planners, who have doubled the five-year load growth forecast over the past year. The nationwide forecast of electricity demand jumped from 2.6% to 4.7% growth over the next five years, according to FERC filings – and these forecasts are likely an underestimate, Grid Strategies said. Recent updates have tacked on several GW to that forecast, and next year’s will likely show an even steeper growth rate.
Meanwhile, Meta and its contemporaries in the data center space are gobbling up renewable energy certificates (RECs) left and right.
Meta recently partnered with Arevon Energy on a third Environmental Attributes Purchase Agreement (EAPA) for Arevon’s Heirloom Solar in Pike County, Indiana.
This month, Google announced a 1.5 GWp solar development contract with Energix Renewables and closed on a tax equity investment with Swift Current Energy on the massive 800 MWdc Double Black Diamond project in southern Illinois.
Microsoft and Pivot Energy signed a five-year framework agreement to develop up to 500 megawatts (MWac) of community-scale solar energy projects across the United States between 2025 and 2029. In May, Microsoft inked two 15-year PPAs with developer RWE for two new onshore wind farms in Texas with a combined capacity of 446 MW and shook hands with Canada’s Brookfield Asset Management on the largest single corporate PPA ever, agreeing to develop more than 10.5 gigawatts of new renewable energy capacity.
According to BloombergNEF, Amazon was the most active company in the PPA space last year, purchasing more solar and wind power than the next three companies combined and announcing 74 PPAs totaling 8.8 GW of capacity. The other top PPA purchasers: Meta (3 GW), LyondellBasell Industries (1.3 GW), and Google (1 GW).
