They offer backup power and a way around sluggish permitting — boons for developers scrambling to power data centers.
A clean energy technology often linked with renewables is notching record growth in President Donald Trump’s America, encroaching on fossil fuels even in the Texas oil patch.
Batteries that can store and release big amounts of electricity are increasingly connecting to the electricity grid and major industrial projects like data centers, even without the federal grants and loans offered in the Biden administration.
Those batteries are providing critical backup to the wind and solar industries that Republicans routinely chastise as unreliable — and this year stripped of grants and long-term tax cuts.
“This year is looking extremely strong now with some projects moving ahead quicker than anticipated,” said Allison Weis, global head of storage at consulting firm Wood Mackenzie.
Batteries are expected to account for roughly a quarter of all installations to the grid this year, according to the Energy Information Administration, with storage costs projected to decline substantially in the coming years. In the second quarter of this year, battery installations were 63 percent higher than the same period last year, according to the American Clean Power Association.
All together, the battery market is threatening plans for new natural gas, diesel and coal plants. The reason is simple: Batteries allow companies to store and use power when they need it. That means a data center developer can store solar-generator electricity and use it at night, instead of relying on a fossil fuel plant, like a gas peaker, to step up.
“Batteries and solar are like peanut butter and jelly,” said Mark Dyson, managing director for carbon-free electricity with the environmental group RMI. “There’s a natural diurnal cycle to the sun, obviously, and also therefore to how batteries are going to be operating most economically.”
In deep-red Texas, the battery buzz is growing louder.
“We’re really trying to change the game,” Jon Parrella, the Houston area-based chief executive officer for battery firm Terraflow Energy, said in an interview. “We can get data centers online faster without having to have the grid infrastructure change as massively as everybody thinks [it needs].”
Several factors are driving private investment. Many companies are looking to batteries to meet clean energy pledges — and power demand growth forecasts not witnessed in the U.S. for decades, driven in large part by a scramble to stand up artificial intelligence data centers. Developers are also seizing on batteries to bypass sluggish permitting for new large projects like power plants.
Meanwhile, the One Big Beautiful Bill Act, the marquee Republican legislation this year that cut wind and solar subsidies, delivered a win for batteries, preserving a key tax credit through 2033.
And signs of trouble in fossil fuel markets are also spurring battery growth. Natural gas prices are projected to rise in the coming years, while low crude oil prices are forecast to stymie U.S. production.
Cutting carbon emissions
Parella’s company is developing a project in Bellville, west of Houston, using vanadium flow batteries. That’s a type of battery technology often considered long-duration energy storage (LDES) because they can discharge electricity for up to 10 hours or more. Other long-duration technologies include iron-air batteries and even pumped hydropower storage.
A separate Terraflow project on the Gulf Coast in the Port of Victoria is also advancing. Project partner Optimus Technology Group is planning to use Terraflow batteries at data center projects in Texas, Arizona, Ohio and other states, according to Keith Borie, vice president at Optimus.
The long-duration systems differ from lithium-ion batteries, which are more prevalent today but discharge for shorter periods of time and pose some risks for leakage and fires.
Parella says batteries are competing with “thermal” power generation, a reference to fossil fuels.
“From a carbon footprint, the biggest thing and impact we have is we significantly reduce the need for thermal generation of data centers,” he said. “They do not have to fire up anywhere near as much, and it gives us the ability to significantly reduce that footprint.”
Terraflow is just one company in a broad battery market in the U.S. that’s racing to catch up with global competitors.
“We are way behind other countries in terms of electrification and moving away from fossil-based economies,” said Anna Siefken, a former DOE official under Biden who now is North America policy and markets lead at the industry association LDES Council. “We have to make the market.”
Lithium-ion batteries, similar to technology in smartphones and electric vehicles, currently dominate the market.
They have changed how the grid operates over the past several years, increasingly providing power when demand surges, such as during evening hours in California when the sun is no longer shining. That differs from initial uses of batteries a decade ago to provide power mainly during small disruptions.
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By Brian Dabbs, Christa Marshall | 09/22/2025 06:47 AM EDT
