With the growth of the US population, expansion of many new industries and rising costs of traditional energy, there is a need for both more and cleaner power in the US.
Over the next eight years, peak electricity demand is projected to increase by 33%, with annual electricity usage up 47%. This demand is driven by factors such as population growth, expanded electric vehicle (EV) charging, increased electrification of homes and businesses, heavy industry and manufacturing, the retirement of thermal generation, and the rise of data centres to meet artificial intelligence (AI) computing demand. By 2030, data centres could account for nearly 12% of total US electricity demand.
The ageing American power grid cannot support this major surge in demand. Modernising the energy grid and incorporating new technologies are essential to addressing supply and demand challenges.
Historically, storing electricity generated during off-peak hours has been impossible outside of specific areas suitable for pumped hydropower. Not every location has these preconditions for pumped hydro – namely elevation and water. For example, Texas is not known for its elevation, nor is Arizona for its abundance of water.
Fortunately, batteries have emerged as a practical solution to historical energy capture challenges.
Overcoming energy challenges with BESS
Batteries can enable the modern grid by storing and releasing energy from both traditional (i.e. natural gas, coal) and renewable (wind and solar) electricity generation to deliver power to customers when they most need it. In addition to supporting residential, industrial, and data centre demand for electricity, battery-powered energy storage systems (BESS) can also insulate the grid from large, fluctuating loads.
BESS are helping to bring more power online faster than ever because these projects can be designed, commissioned, and connected to the grid more quickly and efficiently than any other grid technology. In many cases, it can take years for the conventional grid to expand, but new ESS can be deployed to bolster the existing grid in a matter of weeks. BESS are mass-produced, containerised, and scalable from a few dozen to 1000 MWh or more.
In short, BESS help the grid manage the large new loads coming online by making better use of existing resources and avoiding unnecessary infrastructure buildout, while also improving reliability during periods of peak demand.
Batteries and AI
Within the specific context of AI data centres, BESS can smooth out the power quality issues they experience as a result of their unique and volatile load patterns. BESS can also add flexibility for more capacity at AI data centres, helping projects get up and running more quickly and reducing CAPEX costs through the storage of electricity during off-peak hours to be used at times of peak operation. BESS can also help AI data centres be more responsible utility customers by smoothing out potential load changes and therefore reducing the burden on the local grid, preventing possible power surges, and keeping energy costs stable.
In fact, the U.S. Federal Energy Regulatory Commission began requiring data centre operators to invest in their own generation and transmission infrastructure starting in June 2026. These behind-the-meter (BTM) solutions can help offset the risk of grid bottlenecks to overall US electricity generation and represent a growing opportunity for BESS.
Batteries have more uses in AI data centres beyond their central role in ESS. In the event of failures, battery-based uninterruptible power supply (UPS) systems can help data centres get back online nearly instantaneously, unlike diesel generators, which are slow to power up. BESS can also be used in concert with diesel generators to ensure seamless operation of these centres.
The wider effects
In addition to helping the grid expand, working more efficiently, better incorporating renewables for a cleaner grid, and offsetting the energy demands of AI data centres, BESS could also potentially help make electricity more affordable.
According to The New York Times, electricity is the second biggest energy expense most people pay after vehicle fuel. Residential electricity prices have soared by 30% since 2020.3
This affordability crisis is driven by:
Transmission and distribution costs.
Rising fuel costs – much of the electricity in the US is generated by burning natural gas, the price of which has been rising since Russia’s invasion of Ukraine and further compounded by the situation in Iran.
Supply and demand – the amount of electricity currently being generated is not matching demand.
The costs of fixing, rebuilding, and operating an increasingly antiquated power grid.
The impact of natural disasters including wildfires in California, storms in the Southeast, etc.
BESS can mitigate these issues by:
Curbing the unnecessary buildout of new transmission lines and power generation just to satisfy peak demand.
Enabling more incorporation of renewables like wind and solar into the electricity sourcing while still being compatible with traditionally created energy.
Creating electricity at off-peak hours and storing it for when it is needed to compensate for fluctuations in sourcing and demand.
Helping modernise the grid.
Helping offset the impact of wildfires, storms, and other natural events that threaten grid stability.
While ESS is currently the primary focus in the US for battery manufacturers like LG Energy Solution, it is important to remember that the large-format battery business was built on the back of the EV market. The EV market has not taken off as expected, but LG Energy Solution has responded by:
Expanding overall capacity by converting existing EV lines at many of its North American plants to ESS lines.
Scaling up its ability to build larger pack and link systems, also in the US LG Energy Solution does not just build battery cells, but complete energy storage systems – 20-ft-long ESS enclosures capable of 5.11 MWh of storage, which are grouped together at energy storage sites and operated with advanced software to create gigawatt-hour scale deployments across the US.
Strengthening its overall product competitiveness by adding technologies like lithium-iron phosphate prismatic batteries to its mass-production portfolio.
Working toward commercialising additional long-duration ESS technology like sodium-ion batteries.
Powering the future
With their ability to create jobs at all levels, enable essential electricity growth, and modernisation while powering key industries, batteries should be seen as a critical component of American infrastructure and a critical way to ensure affordable, consistent, and plentiful energy to meet growing societal demands.
For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.
Energy Global’s Autumn 2026 issue
The Autumn issue of 2026 is available now! The new issue begins with a regional report on Asia Pacific, looking at the region’s transition from building capacity to building systems. The issue also explores topics such as offshore wind foundations, solar maintenance, training the new workforce, inspection & maintenance, and more! With insights from experts such as Everllence, BW Ideol, EM&I, Watson Farley & Williams, and many more, make sure to check out this issue now.
