Data centers are likely to become a big market for batteries over the next five years, predicts a director at the Swedish power company Vattenfall.
Owners of data centers see advantages to battery installation such as energy security and co-location with renewables, Vattenfall’s head of battery projects Sebastian Gerhard told Bloomberg New Energy Finance. Diesel generation sets are still common at data centers but that is starting to change as they go “green,” Gerhard noted.
“Batteries at data centers would deliver uninterrupted power supply, so that data are not lost,” he said in the BNEF interview. “The battery would become useful on the rare occasion there is grid failure. We see data centers being powered by a combination of rooftop solar, wind energy via PPAs and batteries.”
Stationary storage offers C&I customers potential savings, Gerhard said. “Commercial and industrial consumers can save 10 to 20% off the kilowatt price of energy in Germany if they invest in stationary storage for peak shaving.” He added that these batteries lower demand during peak hours to equal around $35,000 to $93,000 savings annually.
Vattenfall’s core countries are Denmark, Sweden, Germany, the Netherlands and the UK. Last fall, Microsoft signed a PPA with Vattenfall to purchase all the electricity from a 180-MW wind farm being built in the Netherlands. That deal was the power company’s first with a data center outside Nordic countries.
Currently Vattenfall is going through their portfolio internally to identify opportunities to install batteries where they already have renewable energy projects with low grid costs and affordable land leases, according to Gerhard. Batteries don’t require much space, he pointed out, and it’s possible to take advantage of existing infrastructure, particularly at wind sites.
Gerhard told BNEF that he thinks the battery market for data centers will ramp up within the next five years. “We see a significant market volume here,” he said. “To supply a data center with a battery, the capacity would not be less than 15 megawatts per customer site.”