Every year between now and 2027, the world’s hunger for electricity will grow by 4%, about the same as powering all of Japan for a year. That’s the International Energy Agency’s latest projection, and data centers will be a big reason why. These facilities are expanding so fast that power grids in key markets are already stretched to their limits.
For decades, the industry’s safety net has been the diesel generator, a guaranteed source of emergency power, but one that comes with a heavy cost. In an era when every major cloud provider is promising net-zero emissions, those black smoke clouds from test runs and outages are now the clearest sign that their climate promises don’t match their actions.
Cities from Dublin to Singapore are tightening permitting rules, and in some places, new diesel capacity is facing outright bans.
That’s the backdrop against which Battery Energy Storage Systems (BESS) are stepping into the spotlight. Once seen as a niche or experimental backup option, they’re now being pitched as cleaner, quieter, and increasingly cost-competitive replacements for diesel. In other words, their role is shifting from just in case to frontline power partner.
From Backup to Backbone, Why BESS Is Having Its Moment
For years, Battery Energy Storage Systems (BESS) were mostly seen as a safety net, a backup plan to keep data centers running during short outages or grid failures. But the energy landscape is changing fast, and BESS is stepping into a much bigger role.
One big reason is the growing pressure on power grids worldwide. As renewable energy sources like solar and wind make up a larger share of electricity generation, the supply becomes less predictable. The sun doesn’t always shine, and the wind doesn’t always blow. This intermittency can lead to sudden drops in power availability, creating challenges for data centers that demand constant, reliable energy.
BESS offers a way to smooth out these fluctuations. By storing energy when it’s abundant and releasing it when needed, batteries help data centers ride through power dips without relying on polluting diesel generators or unstable grid power.
Another factor boosting BESS adoption is the increasing cost-effectiveness of battery technology. Over the past decade, lithium-ion battery prices have fallen sharply, by nearly 90% since 2010. This price drop makes BESS more affordable not just for emergency backup but as an active part of a data center’s energy strategy.
Moreover, regulatory pressures and corporate sustainability goals are pushing data centers to reduce their carbon footprints. Many operators are setting ambitious net-zero targets, making clean backup power a business priority, not just an environmental one.
Some leading companies are already pioneering this shift. Microsoft’s data center in Sweden, for example, replaced its diesel generators with a battery system that can provide up to 80 minutes of backup power. This move supports their goal of running diesel-free data centers by 2030, showing that BESS is now a practical, scalable solution.
As BESS technology matures and costs continue to fall, its role in powering data centers is evolving from a backup lifeline to a core component of energy resilience, sustainability, and efficiency.
How Battery Energy Storage Systems (BESS) Work: A Technical Overview
Battery Energy Storage Systems, or BESS, are essentially large batteries that store electricity when it’s available and release it when it’s needed. This makes them perfect for data centers, which require a constant and reliable power supply.
Most BESS use lithium-ion batteries, the same type found in smartphones and electric cars, because they are efficient, reliable, and getting cheaper every year. These batteries store energy as electrical current and can deliver power quickly when there’s a grid outage or high demand.
BESS can react almost instantly, much faster than diesel generators, helping data centers stay online without interruption. They’re also much cleaner, producing no emissions when in use.
By combining smart controls and monitoring, BESS keeps the battery healthy and ensures it works safely and efficiently over time. Because they can be scaled up or down, data centers can install just the right amount of storage they need.
In short, BESS offers a clean, quick, and flexible backup power solution that’s well-suited to the needs of modern data centers.
Understanding how BESS works lays the foundation to appreciate how companies are already putting this technology into action.
Real-World Adoption, Case Studies, and Success Stories
Battery Energy Storage Systems are no longer just theoretical solutions; they are proving their value in real-world data center operations across the globe. Some pioneering companies have already embraced BESS, demonstrating how this technology can replace traditional diesel generators while boosting sustainability and reliability.
A standout example is Microsoft’s data center in Sweden. In October 2023, Microsoft partnered with Saft, a leading battery manufacturer, to replace the facility’s diesel backup generators with a lithium-ion battery system.
This BESS provides up to 80 minutes of emergency power, supporting Microsoft’s ambitious goal of running diesel-free data centers by 2030.
Cedric Duclos, Saft’s CEO, said, “TotalEnergies is proud to support Microsoft in its goal to reduce its emissions from data centers. The collaboration with Microsoft has allowed its affiliate Saft to deliver this system, which shows the huge potential for battery energy storage to decarbonize the digital industry.”
Saft deployed the BESS over 16 months following Microsoft’s approach to data center architecture, which focuses on safety and reliability by creating backup systems in groups that work independently to ensure a high level of redundancy.
As well as displacing the diesel generator, the BESS supports grid stability and provides black start capability to ensure rapid recovery of the power grid in the case of an outage.
Across the Atlantic, EVLO’s 300 megawatt-hour (MWh) BESS in Virginia stands as one of the largest grid-scale battery projects in the United States. While not tied to a single data center, this massive battery installation enhances grid stability in a region where data center demand is rapidly increasing.
Sonia St-Arnaud, president and CEO at EVLO, said,
“EVLO is proud to support Virginia state's ambitious clean energy goals by leading three important BESS projects on its territory. As Virginia aims to modernize its clean energy portfolio, battery energy storage systems like the EVLOFLEX are key in ensuring utilities reach their clean energy standards reliably and safely. Virginia is on a path to an affordable and reliable zero-carbon electricity grid by 2050.”
According to EVLO, “Our system provides critical energy storage that helps balance supply and demand, supporting digital infrastructure growth.” By smoothing out fluctuations and providing backup power, EVLO’s system indirectly supports the resilience and growth of nearby data centers, showcasing how large-scale battery storage can play a crucial role in modern digital infrastructure.
Beyond these headline projects, many other operators are piloting or expanding BESS installations. Cities like Singapore and Dublin, where strict new rules limit diesel backup, are pushing data centers to adopt battery storage to meet regulatory requirements and community expectations.
As sustainability becomes a business imperative, BESS adoption is expected to accelerate.
These real-world examples highlight how BESS is transitioning from an experimental technology to an essential part of data center power strategy. As Christian Belady puts it, “The cleanest kilowatt-hour is the one you never use, but when you need it, having clean backup power matters.”
This shift toward clean, flexible, and reliable energy storage is reshaping how data centers manage power and reduce their environmental footprint.
Challenges, Cost, and the Future Outlook
While Battery Energy Storage Systems offer many advantages, they also face some challenges on the path to widespread adoption in data centers. One key hurdle is the upfront capital cost. Although lithium-ion battery prices have fallen dramatically over the past decade, installing a large-scale BESS still requires significant investment. However, falling battery costs and the rising price of diesel fuel are improving the economic case for BESS every year.
Another consideration is battery lifespan and recycling. Lithium-ion batteries typically last around 10 to 15 years, and responsible recycling or second-life reuse programs are essential to minimize environmental impact.
Data center operators and manufacturers are actively developing solutions to address these issues, with growing industry standards guiding battery safety and sustainability.
Integration complexity is also a factor. BESS requires sophisticated control systems and grid coordination to ensure smooth operation and safety. Data centers working with experienced energy partners and leveraging advanced software platforms can mitigate these risks effectively.
Looking ahead, the future for BESS in data centers is bright. Advances in battery chemistry, such as solid-state and flow batteries, promise even safer, longer-lasting, and more affordable storage options.
Moreover, as renewable energy penetration grows, the role of BESS will expand beyond backup power to active grid services like demand response and frequency regulation, making data centers more resilient and sustainable.
In short, while challenges remain, the momentum behind BESS adoption is strong. With ongoing technological improvements, supportive regulations, and a growing emphasis on decarbonization, Battery Energy Storage Systems are set to become a cornerstone of data center power strategy in the years to come.
Conclusion: Powering the Future, Is BESS the Game-Changer?
Battery Energy Storage Systems are no longer a futuristic concept or just a backup plan; they’re rapidly becoming a vital part of the data center power landscape. As electricity demand surges and sustainability takes center stage, BESS offers a cleaner, quieter, and increasingly cost-effective alternative to diesel generators.
Real-world examples from Microsoft to EVLO show that these systems can deliver reliable backup power while supporting broader goals like carbon reduction and grid stability.
Challenges remain, from upfront costs to technical integration and battery lifecycle management. But ongoing advances in technology, policy support, and growing corporate commitments to net-zero emissions are driving momentum that cannot be ignored.
So, is Battery Energy Storage the game-changer data centers have been waiting for?
The evidence suggests yes, BESS is transforming from a safety net into a strategic power partner that will help shape a more resilient, sustainable, and efficient digital future.
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