Analysis indicates 330 GW of data center capacity is currently planned across the US as AI demand surges, creating opportunities for battery and grid storage.
The rapid expansion of data centers, driven by artificial intelligence development, is intensifying pressure on the US power system. According to a new report from Aurora Energy Research prepared for Fluence, battery energy storage systems (BESS) can help bridge the gap between the pace of data center development and the time required to expand power generation and grid infrastructure.
Aurora identifies approximately 330 GW of data center projects currently planned across the United States. The firm projects that data centers could account for 7% to 20% of total US electricity consumption by 2035, compared with roughly 4%–5% today.
Access to power has become a primary constraint on new development. Interconnection queues across major US electricity markets remain heavily backlogged, with timelines extending several years, while new thermal generation and transmission upgrades require between three and seven years to complete. This pace contrasts sharply with AI infrastructure deployment, where companies seek to bring new computing capacity online much more quickly.
Battery storage systems can be deployed within 12 to 18 months, potentially serving as a bridge while full grid interconnection for data centers is completed. Beyond accelerating power access, batteries can respond to rapid fluctuations in electricity demand from GPU clusters used to train AI models, provide support during grid stress, and help facilities comply with voltage ride-through requirements. Their flexibility also allows storage assets to participate in wholesale, ancillary services and capacity markets when on-site power is not required, creating additional revenue opportunities that improve project economics.
Aurora examines three main battery deployment configurations: front-of-the-meter systems connected directly to the grid, behind-the-meter installations linked to data center consumption, and islanded systems capable of independent operation. These are assessed across six areas: speed to power, reliability and backup, voltage ride-through, load ramping control, market participation, and bridging or islanded operation. However, no single configuration provides the optimal solution for every project. The appropriate model depends on the electricity market, regulatory framework and the requirements of hyperscalers, colocation developers, independent power producers and utilities.
Regulatory changes underway across US electricity markets are expanding commercial opportunities for battery storage. The Federal Energy Regulatory Commission (FERC) has issued Section 206 show-cause orders directing six of the seven US independent system operators to address large-load interconnection rules, cost allocation and voltage ride-through requirements.
In ERCOT, Aurora highlights the Provisional Controllable Load Resource program and Capacity Attribution Contracts. Combining these mechanisms with co-located storage could significantly reduce data centers' exposure to curtailment. In PJM, the Bring Your Own Generation pathway benefits battery storage through its Effective Load Carrying Capability (ELCC) ratings—storage requires significantly less installed capacity than variable renewable resources to meet equivalent accredited capacity requirements. In Southwest Power Pool (SPP), the HILLGA fast-track process could allow qualifying battery projects to complete interconnection studies in approximately 150 days.
State-level changes are creating additional pathways for storage deployment. Virginia has introduced a 14-year large-load tariff, while Georgia and Arizona are undertaking gigawatt-scale utility procurements. Clean energy mandates in Washington and Oregon could also drive additional battery storage investment.
For Farhad Billimoria, Head of USA West at Aurora Energy Research, the AI infrastructure buildout represents one of the most significant new sources of electricity demand the US grid has faced in a generation. "The question is no longer simply whether battery storage can form part of the solution, but rather where, under which configurations and within which regulatory frameworks it can deliver the greatest value," he argues.
The expansion of data centers is adding a new dimension to the US battery storage market. Beyond its established role in renewable energy integration and grid flexibility, storage is increasingly positioned as a tool to serve large new electricity consumers in a system where grid development timelines are struggling to keep pace with demand growth.