As the demand for artificial intelligence surges, data center operators are turning to an unconventional solution: pairing energy storage systems with on-site fossil fuel generation. According to BloombergNEF, 4.9 gigawatts of energy storage projects co-located with gas generators have been announced globally, accounting for 32% of on-site data center battery capacity.
This trend is driven by the need for reliable power in an era where grid interconnection delays can stretch to four years. Companies like Caterpillar Inc. and GE Vernova Inc. are now offering products that combine energy storage with gas generation, enabling data centers to meet sharp demand spikes from computing-intensive tasks like AI model training.
"Batteries really help support the turbines and give us the 99.999% reliability," said Rob Wingo, Executive Vice President at Williams Cos., at the S&P Global Power Markets Conference.
Major projects, including Elon Musk’s Colossus supercomputer in Memphis and Pacifico Energy’s GW Ranch in West Texas, are deploying Tesla Megapacks alongside gas turbines to create off-grid power plants. However, this approach raises environmental concerns, as natural gas emits planet-warming greenhouse gases and contributes to local air pollution.
The GW Ranch project recently received the largest air pollution permit ever granted in the U.S., while the Memphis facility has faced lawsuits alleging its gas turbines worsen air quality in historically Black communities. Despite these challenges, the combination of batteries and fossil fuels is projected to support 9.8 gigawatt-hours of gas generation at data centers through 2030.