For decades, the battery functioned as a static asset within the data center ecosystem, utilized exclusively for passive backup. Legacy Valve-Regulated Lead-Acid (VRLA) batteries were deployed to do one thing: idle at full charge and wait for power failures. Their versatility beyond this was limited mainly by low performance; VRLA batteries possess low cycle lives (typically 200–500 cycles) and degrade rapidly under frequent discharge, making them unsuitable for a more active role.
Two trends have emerged that are reshaping the dynamic. For one, the rapid acceleration of artificial intelligence workloads is pushing data center power demands into uncharted territory. AI server rack power density is quickly transitioning from a historical average of 6–10 kW to over 120 kW per rack and those racks need not only backup in outages but intense amounts of steady, quality power. For two, battery technology has made leaps and bounds: the last decade has seen new battery formulations, falling costs, and breakthroughs in performance. This is causing operators to reexamine what’s possible with battery storage systems in data centers, and to think deeply as to what extent batteries can best support modern data centers.
The best way to understand this evolution is to look at the specific demands of an AI facility. Once we understand these key use cases, we can see exactly why the industry is moving toward different designs and better battery technologies
The Divergence of the UPS Market: Optimization vs. Efficiency
The traditional UPS system was sized to provide 10 to 15 minutes of runtime. This duration was necessary to give older diesel generators enough time to crank up, stabilize, and take over the load.
This has changed as modern backup generators can now start and accept a full load in under 15 seconds. Maintaining 15 minutes of battery capacity for a facility that requires only a 60-second bridge is now becoming overkill. The fastest-growing segment is therefore the 1-minute UPS, designed to simply bridge the brief gap between a grid failure and the generator turning on.
However, “right-sizing” to a 1-minute duration creates a technical barrier for standard lithium-ion batteries, often referred to as the “Power-Energy Mismatch” or “Death Valley.”
Standard lithium-ion cells are typically designed to release their energy slowly over an hour or more. A 1-minute bridge, however, demands that the battery release its energy almost instantly. Attempting to pull this much power so quickly from a standard battery generates extreme heat and stress, which can lead to failure or fire risks.
This creates a dilemma for UPS: operators must either oversize their lithium batteries by 4x–5x just to handle the sudden power surge or adopt high-performance chemistries that are capable of extreme discharge rates without overheating.
Managing Volatility: The Battery as an Active Buffer
Beyond backup, storage assets are assuming a new role as active infrastructure required to mitigate the volatility of AI workloads. Unlike traditional web-hosting loads, which remain relatively flat and predictable, AI training workloads are cyclical and highly volatile.
A training job can demand the full capacity of a supercomputer instantaneously, creating power spikes ranging from 2% to 10% of a facility’s total capacity in sub-seconds. Utility grids generally lack the ramping capability to match this variability, risking regional frequency instability or voltage sags.
To prevent brownouts and grid penalties, operators are deploying battery energy storage systems (BESS) as active buffers. In this peak shaving model, the battery draws power from the grid at a steady rate and discharges rapidly to meet the instantaneous demands of the GPU cluster. This effectively smooths the facility’s load profile from the utility’s perspective.
This use case, however, introduces a high-cycling regime that is detrimental to traditional chemistries. Lithium-ion batteries degrade faster than anticipated under these deep, daily discharges, often requiring replacement within 7–10 years depending on depth of discharge (DoD). This drives demand for more durable solutions that can withstand high-frequency cycling without significant capacity fade.
The Shift to “Grey Space”: Risk Mitigation and Asset Consolidation
As power density rises, the physical siting of energy storage is shifting from the white space to the “grey space” or outdoor yards.
The “white space” housing servers has become premium real estate. With server racks valued in the millions, the operational risk tolerance for fire is effectively zero. Introducing high-energy-density batteries with flammable electrolytes into the server hall presents an unacceptable risk profile for many operators and their insurers.
Moving storage outdoors unlocks the generator replacement use case. Rather than relying on diesel generators, which face supply crunches, increasing regulatory scrutiny and permitting challenges, facilities can deploy utility-scale BESS for long-duration backup (4 to 8 hours). This consolidates the power chain, allowing a single medium-voltage system to function as both the short-term UPS and the long-duration backup.
However, outdoor siting exposes batteries to ambient temperature extremes. Lithium-ion batteries generally require an operating range of 20°C–25°C to maintain safety and longevity. Maintaining this narrow band outdoors necessitates complex, energy-intensive HVAC systems, which reduces the system’s round-trip efficiency (RTE). Non-flammable chemistries that can maintain performance and safety across a wider temperature range without parasitic cooling loads have significant potential here.
Primary Power: Circumventing Grid Constraints
The most significant strategic evolution is the transition to primary power. This shift is a direct response to grid capacity limitations; utility interconnection queues in major data center hubs have extended significantly, with wait times now averaging over four years—double what they were in the previous decade.
To maintain deployment velocity, operators are adopting “bring your own power” strategies, co-locating massive solar, wind, or thermal assets on-site. In this architecture, the battery serves as the primary power source, storing renewable energy during generation windows and powering the facility independently for 4 to 12 hours during non-generation periods.
This application demands a technical profile distinct from the indoor UPS. Sited outdoors and cycled daily, these batteries must prioritize Levelized Cost of Storage (LCOS), deep discharge capability, and intrinsic safety over simple power density. Unlike a UPS which may cycle once a month, these assets cycle daily, making cycle life and degradation curves the primary economic variables.
Enabling the Active Data Center
The shift from passive backup to active critical infrastructure represents a fundamental change in how data centers consume and manage energy. Whether mitigating grid volatility or establishing primary power, the new generation of use cases requires storage assets that are as dynamic as the workloads they support. Relying on legacy chemistries—whether the limited cycle life of VRLA (lead-acid) or the thermal risks associated with lithium-ion—will only introduce inefficiencies and safety constraints as power densities climb.
To fully realize the potential of the active data center, the industry must adopt storage solutions that offer high power capability and intrinsic safety without the need for complex mitigation systems. This is where next-generation, non-flammable battery technologies, like those developed by Alsym Energy, play a pivotal role. By bridging the gap between performance and safety, these advanced chemistries allow operators to confidently decouple growth from grid constraints and secure a power strategy resilient enough for the demands of tomorrow.
Interested in learning more how Alsym can provide a versatile energy storage solution for your data center? Get in touch today.