Big batteries are the newest answer to Big Tech’s big energy needs

Like electric utilities across the nation, Minnesota’s Xcel Energy has been staring down a future of more electricity demand, customer frustration around raising rates, and the constant challenge of providing for power-hungry new data centers. The US Energy Information Administration predicts energy use will hit record highs this year.

A new deal between Xcel, Google, and Form Energy, a West Virginia-based startup focused on developing a novel type of industrial-strength battery, underscores how the energy storage sector can help solve that challenge — and collect on some of the billions of dollars utilities are spending annually on infrastructure.

Google’s forthcoming Minnesota data center will feature the world’s largest storage battery by capacity, a 300-megawatt iron-air battery that will be able to store 30 gigawatt-hours of energy, enough to power 3,000 average US homes for an entire year. The iron-air batteries will be set inside shipping containers that will be linked together to store power; according to Form, the combined cells could take up a space as big as roughly 110 football fields, end zones included, depending on where it’s sited. (It doesn’t need to be adjacent to the data center.) 

The idea is that with the Big Tech firm bankrolling the massive battery and adding additional capacity to the grid, it will, in theory, allow the utility to power a new data center in the state without raising residential rates. 

“Battery storage is so much cheaper than it was just two years ago,” said Allison Feeney, a research analyst at Wood Mackenzie, an energy consultancy. “Batteries will be in demand from data centers, especially in the next five or so years, when the natural gas supply chain is relatively maxed out. There’s not really any other alternatives.”

A Department of Energy study found that as America’s grid becomes increasingly strained by rising demand, without adding new power generation, blackouts will be 100x more likely by 2030. We’ll see more shortages in heat waves and cold snaps, which already stress the grid, as well as longer queues to hook up high-powered manufacturing and industrial sites. Large-scale batteries have emerged as a sought-after solution, with the sector making them showing the spark and stamina of the Energizer Bunny. 

This kind of distributed energy solution, which stores power during waning usage, allows strained grids to dispatch power during moments of peak demand. US battery storage installations rose 30% last year, and fully two-thirds of the nation’s new capacity last year was installed in red states. Texas has installed so many batteries, it’s about to overtake California in total capacity.

“If the grid can’t keep up with the pace of growth and demand, then we need to be innovative,” said Brian Rappaport, managing director and head of commercial energy solutions at JLL, a global real estate brokerage and services firm. “We need to start looking at other technology solutions; distributed energy resources can be deployed much faster than it takes to build a new power plant.”

No matter how much the scales are tilted in favor of fossil fuels due to the Trump administration’s “energy dominance” agenda, the benefits of steady, dispatchable, rechargeable power are sought after by Corporate America. Companies, especially utilities, have been scrambling to buy new batteries and set up new battery-manufacturing capacity. 

Tesla, which made nearly $13 billion in revenue from energy generation and storage (aka batteries) last year, plans on opening Megafactories in both Texas and outside Shanghai to capitalize on its massive utility-scale battery business, which has become one of the fastest-growing parts of the company. Real estate company Clayco just started an entire Power & Energy subsidiary focused in large part on industrial-scale batteries, and predicts it’ll be making $300 million a year in revenue by 2027. Korean LG is seeing increased revenue from large-scale battery sales, so much so that it mitigated what would have been serious quarterly losses at the end of last year. 

Even automakers like Ford see value in reallocating capacity at their new EV battery plants to build out more large-scale battery storage; the company will utilize plants in Kentucky and Michigan and begin shipping 20-gigawatt-hour battery storage systems by 2027.  

“All the energy rates are going up, and we are seeing a larger demand for batteries,” said Gilbert Lee, cofounder of Torus, a Utah-based battery manufacturer. 

According to the latest US Energy Storage Monitor report, released March 24 by the American Clean Power Association and Wood Mackenzie, the last quarter of 2025 set an installation record of 5.8 gigawatts, and growth is expected to skyrocket. The report predicts 500 gigawatts will be installed between 2026 and 2031, a 250% jump from the previous five years. 

“This record-breaking year for energy storage is just the beginning of its rise as a cornerstone of America’s energy future,” said Darren Van’t Hof, interim president and CEO of the Solar Energy Industries Association. “Whether it’s paired with solar or standing on its own, energy storage lowers consumer costs, makes the grid more reliable, and keeps the power on in homes during outages.” 

Part of that boost, especially massive utility-scale installations, came from the federal Investment Tax Credit requirements that expired in 2025, as developers had rushed to get projects underway. Data center developers have been searching for power capacity to either get online quicker or add capacity without upsetting other ratepayers. Last year, Aligned, a data center developer, announced it was building a large-scale battery at its campus in Hillsboro, Oregon, with a new battery from Calibrant, which it predicts will help it open years earlier. 

The US Energy Storage Monitor report also predicts that what it calls the Community, Commercial, and Industrial sector — factories, commercial real estate, institutions like universities — will see storage installations grow 39% between now and 2030 as lower costs and policy support “expand profitable business cases.” As Rappaport says, it’s a form of insurance — whether you’re a hospital or a manufacturing plant, how much is the cost of downtime if the power goes out? 

Torus has been seeing increasing demand from manufacturing and data centers, but also schools and stadiums seeking more resilience. In states like New Jersey and Massachusetts, where there’s an ability to sell back power at competitive rates, rooftop solar and battery installations offer a compelling case. 

Like other energy technologies, more adoption tends to shrink costs and incent the development and deployment of new technologies. There’s a race between startups to figure out thermal battery storage — massive heat-storing systems that can decarbonize industrial processes and manufacturing sites, creating additional energy savings — as well as other long-duration storage systems that can provide even more resilience. In addition, schemes to link up networks of home batteries to function like peaker plants are launching across the country.

Feeney also said that the growth of battery manufacturing in the United States means that while today most of the large-scale installations include cells built overseas, by 2030, most installations will be US-based battery cells. 

“We’ve just been increasingly raising our forecast for the last two years,” Feeney said.

Patrick Sisson is a reporter covering cities, technology, and business.