Data Center Battery Market - By Battery (Lead-acid, Lithium-ion, Nickel zinc), By Battery Capacity (Small-Scale, Medium-Scale, Large-Scale), By Application (UPS, Backup Power Systems, ESS, Peak Shaving & Load Balancing), By Data Center & Forecast 2024 – 2032

Data Center Battery Market Size

Data Center Battery Market was valued at USD 3.2 billion in 2023 and is estimated to register a CAGR of over 5% between 2024 and 2032, due to continuous innovations in power systems tailored for data centers. As data centers become increasingly vital for modern operations, the need for an uninterrupted power supply grows exponentially. Innovations such as advanced energy storage technologies, efficient battery management systems, and integration with renewable energy sources are revolutionizing the way data centers manage power.
 

For instance, in March 2024, Sidewalk Infrastructure Partners (SIP), unveiled its newest initiative Verrus. This groundbreaking concept introduced a flexible approach to data center energy management. Utilizing "microgrids" powered by cutting-edge, high-capacity batteries and sophisticated software algorithms, Verrus aims to analyze and distribute energy efficiently across various tasks and applications.
 

These innovations not only enhance reliability but also contribute to sustainability efforts by reducing carbon footprints. Moreover, the rising adoption of cloud computing, artificial intelligence, and IoT necessitates robust power infrastructure, further boosting the demand for data center batteries. In essence, the convergence of technological advancements and escalating data center requirements is driving a significant surge in the demand for batteries tailored for data centers.

The burgeoning demand for batteries in data centers reflects the escalating need for uninterrupted power supply in our digital era. As data centers become the backbone of modern technological infrastructure, the imperative for reliable energy storage solutions intensifies. These batteries serve as a vital safeguard, providing backup power during grid disruptions and enabling uninterrupted data processing and storage. Moreover, with the proliferation of cloud computing, IoT devices, and artificial intelligence, the demand for data center batteries continues to soar, highlighting their indispensable role in sustaining the digital ecosystem's growth and resilience.
 

For instance, in January 2024, Keppel was actively pursuing the installation of battery energy storage systems (BESS) at its data centers in Dublin, Ireland. The company submitted applications to the Fingal and South Dublin County Councils for approval to implement BESS at its two facilities in the Irish capital.
 

Environmental concerns and sustainability initiatives drive the adoption of energy-efficient technologies in data centers. Battery energy storage systems offer a green alternative to traditional backup generators, providing cleaner and more sustainable power backup solutions. By integrating renewable energy sources and optimizing energy usage through intelligent battery management systems, data centers can reduce their carbon footprint and contribute to environmental conservation efforts.
 

Despite its rapid growth, the data center battery market faces several key restraints. Cost remains a significant barrier to adoption, with the initial investment in battery systems often proving prohibitive for some data center operators. Additionally, concerns surrounding the environmental impact of battery manufacturing, operation, and disposal pose challenges, particularly considering increasing sustainability regulations.
 

Furthermore, technological limitations, such as the limited energy density and lifespan of current battery technologies, constrain their efficacy in meeting the evolving demands of data center operations. Lastly, regulatory hurdles and uncertainty surrounding energy policies may impede the widespread deployment of battery energy storage systems in data centers, hampering market expansion. Addressing these restraints will be crucial for unlocking the full potential of battery solutions in the data center industry.
 

Data Center Battery Market Trends

The data center battery industry is witnessing a dynamic shift driven by the surge in product launches from industry-leading companies. These launches reflect a response to the evolving needs of data centers to ensure uninterrupted power supply and enhance energy efficiency. One notable trend is the introduction of innovative battery technologies with improved energy density, longer lifespans, and faster charging capabilities, catering to the growing demand for high-performance energy storage solutions.
 

Moreover, leading companies are focusing on integrating advanced battery management systems and intelligent software platforms to optimize energy usage and enhance system reliability. Additionally, there is a notable trend towards the development of sustainable battery solutions, aligning with the growing emphasis on environmental responsibility and energy conservation in the data center industry. These trends underscore the dynamic nature of the market, driven by continuous innovation and a commitment to meeting the evolving needs of modern data centers.
 

For instance, in October 2023, ABB was expanding its power protection product lineup for data centers by incorporating nickel-zinc batteries, with ZincFive onboard as a supply partner for its uninterruptible power supply (UPS) solutions. The inclusion of NiZn battery chemistry presents mission-critical data centers with a robust, effective, and environmentally friendly energy storage option.
 

Data Center Battery Market Analysis

Based on battery, the market is divided into Lead-acid, lithium-ion, nickel zinc. The Lead-acid segment dominates by surpassing a value of over USD 1.4 billion in 2023 and is projected to exceed USD 2.1 billion by 2032. Despite the emergence of newer battery technologies, lead-acid batteries remain a popular choice due to their reliability, affordability, and familiarity in data center applications. These batteries offer proven performance in providing backup power during grid outages, ensuring uninterrupted operations for critical data center infrastructure. Additionally, advancements in lead-acid battery designs, such as sealed maintenance-free variants, further enhance their appeal for data center applications. As data centers continue to expand globally, the demand for lead-acid batteries as a reliable energy storage solution is expected to remain strong.
 

Based on the application, the market is categorized into UPS, backup power systems, ESS, peak shaving & load balancing. The UPS segment held a major market share of around 52% in 2023 and is expected to grow significantly, UPS systems, relying on batteries as a core component, offer critical backup power during grid failures, protecting data centers from costly downtime and data loss. With the escalating reliance on digital services and the increasing frequency of power disruptions, the need for reliable UPS solutions is paramount. Consequently, data center operators prioritize investment in high-performance battery systems to maintain uninterrupted power supply and safeguard against potential disruptions, driving sustained demand in the market.
 

Asia Pacific dominated the global market with a major share of over 53% in 2023. In Asia Pacific, the data center battery market is experiencing a proliferation of digital services, cloud computing, and IoT adoption, data center operators in the Asia Pacific are investing heavily in robust energy storage solutions to ensure uninterrupted operations. Additionally, government initiatives promoting digitalization and data center development drive market growth. As businesses increasingly rely on data-driven operations, the need for reliable battery backup systems to mitigate the risks of power outages intensifies, underscoring the significant demand for data center batteries in the Asia Pacific region.
 

The data center battery industry in the United States is witnessing a surge in demand driven by the country's extensive data center infrastructure and digital economy. With the proliferation of cloud services, IoT devices, and online transactions, data centers require robust backup power solutions to ensure uninterrupted operations. Additionally, the U.S. government's focus on cybersecurity and data protection further amplifies the need for reliable energy storage systems in data centers. As businesses and consumers alike increasingly rely on digital services, the demand for data center batteries in the U.S. continues to grow steadily.
 

Data Center Battery Market Share

EnerSys, LG Energy Solution and Leoch International Technology hold a significant market share of over 21% in the data center battery industry. These companies have invested significantly in research and development, allowing them to continuously improve their battery technology and stay ahead of the competition. This commitment to innovation has enabled them to develop advanced battery chemistries, such as lithium-ion and lead-acid variants, that offer superior performance and efficiency compared to traditional battery technologies.
 

This commitment to innovation has enabled them to develop advanced battery chemistries, such as lithium-ion and lead-acid variants, that offer superior performance and efficiency compared to traditional battery technologies.
 

Data Center Battery Market Companies

Major players operating in the market are:

• C&D Technology
• Delta Electronics
• East Penn
• Eaton Corporation
• EnerSys
• Exide Technologies
• Leoch International Technology
• LG Energy Solution
• Narada Power Source
• Samsung SDI
   

Data Center Battery Industry News

• In January 2024, Exide Technologies, a provider of energy storage solutions for stationary applications, unveiled its latest product line, the 'Sprinter Pure Power' battery range. Tailored for utilization in data center uninterruptible power supplies (UPSs), these cutting-edge AGM batteries cater to a diverse array of applications, the company revealed.
   
• In October 2023, Microsoft opted for a battery energy storage system (BESS) from Saft for its Swedish data center, following previous criticism over its reliance on diesel backup generators in the region.
   

The data center battery market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Mn) and shipment (in units) from 2021 to 2032, for the following segments:

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Market, By Battery

• Lead-acid
  • By construction
    • Flooded
    • VRLA
      • AGM
      • GEL
• Lithium-ion
  • By chemistry
    • LFP
    • LCO
    • LTO
    • NMC
    • NCA
    • LMO
• Nickel zinc
• Others

Market, By Battery Capacity

• Small-Scale Batteries (Below 100 kWh)
• Medium-Scale Batteries (100 kWh - 1 MWh)
• Large-Scale Batteries (Above 1 MWh)

Market, By Application

• Uninterruptible Power Supply (UPS)
• Backup Power Systems
• Energy Storage Systems (ESS)
• Peak Shaving and Load Balancing

Market, By Data Center

• Enterprise Data Centers
• Colocation Data Centers
• Hyperscale Data Centers
• Edge Data Centers

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Spain
  • Italy
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America
• MEA
  • UAE
  • South Africa
  • Saudi Arabia
  • Rest of MEA