Data Center Energy Storage Market

Data Center Energy Storage Market Size

The global data center energy storage market was valued at USD 2 billion in 2024 and is estimated to register a CAGR of 7.7% between 2025 and 2034. As data centers increasingly turn to non-emitting energy solutions, there is a noticeable rise in the need for Battery Energy Storage Systems (BESS). By minimizing dependence on conventional electrical grids and promoting the use of green data center systems, the energy produced from the consumed electricity can be saved in a dependable manner since solar or wind energy can be harnessed.

It could be reasoned that this growing trend towards technologies that are greener and more energy efficient is one of the major reasons boosting the growth of the BESS market, as companies wish to meet their sustainability objectives whilst also guaranteeing reliable power for the functioning of their centers. For instance, Schneider Electric announced the sale of a BESS that is suitable for energy provisioning at construction sites that are cost effective, expansion friendly, and are to be completed in April of 2024.

The system is versatile as it operates on both AC and DC systems and its working output ranges from 60 kW to 2 MW. Energy storage systems have become a must for modern data centers, especially with the soaring electricity use and traffic surge which can lead to outages, a potent and scalable backup is indispensable. The data center industry has different energy requirements and this is why there are batteries with 2-hour and 4-hour sizes, which can be attached to the servers or cooling systems.

Balanced effectiveness and reliability is the focus, and with that being said, it is evident how important energy storage have become. With the use of energy storage technologies such as BESS, backup power for data centers is now readily available without any reliance on fossil fuels. Such means are critical for empowering techniques such as load leveling and peak shaving in high power operation, and act as a backup during critical circumstances, which is essential for the energy storage market in the data centers industry.

Data Center Energy Storage Market Trends

Decarbonization efforts across the globe and the quest to meet Net Zero emissions targets is a very strong motivator for energy storage solutions in data centers. There is an international inclination to implement green energy measures, as well as technologies that assist in integrating energy storage systems and increasing energy efficiency. For instance, in October 2023, Saft compensated Microsoft in view of its intention to convert the datacenter in Sweden that currently uses diesel generators by BESS technologies’ ecofriendly tools. This was integrated in June 2023 and is a part of Microsoft’s Net Zero Plans which aims to eliminate diesel use in data centers by 2030.

Due to the high upfront cost needed to acquire large-scale energy storage systems, the growth opportunities for the market are undermined. It is true that in the long run energy saving and improvement in energy efficiency will pay off, but the cost of acquiring and installing energy storage technologies remains a limitation for small players in the data center market. In addition, the cost and organizational challenges of incorporating these systems into established infrastructures, particularly in aging data centers, are significant barriers as well.

Data Center Energy Storage Market Analysis

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• Based on data center size, the market is divided into small, medium, and large. In 2024, the large held a market share of over 46% and is expected to cross USD 2 billion by 2034. Large data centers are a great innovation that helps in the energy storage market, as there is a need for high-performance and guaranteed systems that would make it possible to run the operations without a hitch and even achieve maximum energy optimization.
  
• Such centers usually aid hyperscale that deal with large amounts of data, and as such, there are growing needs for having scalable solutions available as well. In addition, such centers also seek to promote sustainability, which calls for the use of advanced energy storage technologies such as battery energy storage systems (BESS) and the integration of renewable energy. This mix of innovations can lead to higher operational effectiveness, lower costs, and help meet international expectations on carbon neutral objectives.
  

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• Based on application, the data center energy storage market is categorized into BFSI, colocation, energy, government, healthcare, manufacturing, IT & telecom and others. The colocation market share was noted to be at 30% in 2024. The colocation data centers are appropriately located from the perspective of energy deposits with the intention of enhancing power dependability, minimizing expenses, and optimizing energy consumption
  
• As the need for the colocation service increases, these data centers will be under pressure to be able to provide their customers with constant and uninterrupted power supply. With energy storage systems, for instance batteries, colocation providers can utilize them as a backup power source and also use them to store excess energy during high periods, which assists in efficient energy use and also reduces downtime. Such changes prompting the expansion of the market within the colocation segment as firms seek means that are cost-effective and grow with the shifts in client needs.
  

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• The US accounted for nearly 80% of the North American market in 2024, and nearly 40% of the global data center energy market. The companies are trying to improve their energy efficient systems in order to reduce their carbon impact as the United States region is the strongest for large infrastructure projects.
  
• The trend of employing energy storage solutions such as BESS is growing widely in both, US and Canada which helps in enabling data centers to have more flexibility in energy consumption and underpin sustainability targets. In addition to this, country ability to invest and support in green initiatives is promoting the use of clean energy and energy storage in data centers and hence helping the market to grow.
  
• Europe’s data center energy storage market has been on the rise and for good reason as government policies have been introduced which support green energy as well as a push for the set sustainable goals. The EEC has been strict about implementing laws aimed at reducing carbon emissions, making it possible to deploy carbon emissions-improving technologies such as the use of storage batteries.
  
• Across Europe, especially more so in the Netherlands, data centers are looking for efficient storage mechanisms to improve energy resilience and renewable energy use. Requirements for more sustainable energy solutions together with compliance to environmental requirements are the main drivers necessitating energy storage solutions in the increasingly growing data center market in Europe.
  
• It is predicted that the data centre energy storage market will increase thanks to exploitation of resources in certain countries such as China, India, and Japan. Due to the ever-evolving digital landscape, there is an increased demand for data storage solutions, and that demand is giving rise to e-commerce, cloud computing, and telecom data centres, which have enhanced the data centre construction.
  
• Consequently, energy management systems, such as energy storage systems, are highly effective in optimizing energy needs, enhancing efficiency and reducing costs. This is very true for energy storage technology, whose growing adoption within the data centre industry is closely linked with the ongoing infrastructure development in the region and political intent to foster green energy.
  

Data Center Energy Storage Market Share

• Schneider Electric, Eaton Corporation, ABB, Vertiv, Huawei, Legrand, and Mitsubishi hold a significant market share of over 41% in the market. The company that ranks highest among other companies in the data centre energy storage industry is Schneider Electric owing to their technologically advanced microgrid systems and integrated energy storage systems tackling the energys storage demands. This strategic emphasis on renewable energy management allows us to incorporate advanced controls, optimization and seamless integration with renewables.
  
• Schneider Electric's focus enables them to provide tailored and reproducible solutions to data centers. Schneider Electric's breadth in international geography, complemented by solid competencies in the energy management discipline, allows the company to retain its competitiveness in fast-growing data support systems while helping clients reduce costs and improve sustainability and efficiency.
  
• Eaton has made a marked movement in the data storage market through data seemingly powered with the help of energy solutions and power management. The company has been able to provide enterprises with affordable and conveniently manageable storage systems that enable them to minimize energy costs and consumption while assuring improved backup power supply.
  

Data Center Energy Storage Market Companies

Major players operating in the data center energy storage industry include:

• ABB
• Delta
• Eaton Corporation
• Huawei
• Legrand
• Mitsubishi
• Schneider Electric
• Siemens
• Tesla
• Vertiv
  

The competition within the data center energy storage market is fragmented, composed of technology providers and electric power companies who strive to improve the efficiency and green status of data centers. The leading companies in the abovementioned market are working on comprehensive energy storage solutions, such as advanced batteries, hybrid energy systems and energy storage systems and technologies.

The companies are taking advantage of the rising demand for energy saving, devising modular storage solutions that allow data centers to control power demands, cut down costs, and have quality backup power. Such solutions are frequently implemented where there is existing energy infrastructure, but there are also regulatory policies for energy and sustainability compliance that need to be upheld.

Data Center Energy Storage Industry News

• In June 2024, Legrand bought Davenham and VASS to broaden its data centre portfolio. These acquisitions will boost Legrand’s footprint in the ‘grey’ space (technical rooms) during the same time reinforcing its foothold in the ‘white’ space (server rooms), in the ever expanding data centre market.
  
• In June 2024, Vertiv and Ballard Power Systems entered into a strategic technology partnership for the purposes of backup power solutions for data centres and critical sites, with power output from 200kWs to multiples of MW. The partnership has the aim of proving the technical effectiveness and customer value of hydrogen fuel cell powered solutions. In support of this strategy, Vertiv has used Ballard's fuel cell power modules in its Vertiv Liebert EXL S1 uninterruptible power supply (UPS) developing the concept in a proof of concept at Vertiv’s Ohio location.
  

The data center energy storage market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Mn) from 2021 to 2034, for the following segments:

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Market, By Data Center Size

• Small
• Medium
• Large

Market, By Tier

• Tier 1
• Tier 2
• Tier 3
• Tier 4

Market, By Technology

• Lithium-ion batteries
• Lead-acid batteries
• Nickel-cadmium batteries
• Flywheel energy storage
• Supercapacitors
• Flow batteries

Market, By Application

• BFSI
• Colocation
• Energy
• Government
• Healthcare
• Manufacturing
• IT & telecom
• Others

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

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