AI boom drives data centers to adopt multi-day battery storage as power demands surge

Crusoe Buys Batteries That Last for Days to Power New Data Centers

Form Energy Inc. has reached an agreement to sell batteries that rely on rust and last for days to data center developer Crusoe, as technology companies rush to find resources to meet the growing power needs of artificial intelligence. The battery startup will deliver 12 gigawatt-hours of energy storage to Crusoe starting next year. The terms of the transaction were not disclosed. Form also recently struck a deal to provide a 30 gigawatt-hour battery installation to utility Xcel Energy Inc. to power a Google data center in Minnesota. "This really reaffirms the direction of a lot of the market, which is data centers need that firm, fast capacity," Form Chief Executive Officer Mateo Jaramillo said of the company's new deal. Get the Morning & Evening Briefing Americas newsletters. Get the Morning & Evening Briefing Americas newsletters. Get the Morning & Evening Briefing Americas newsletters. Start every morning with what you need to know followed by context and analysis on news of the day each evening. Plus, Bloomberg Weekend. Start every morning with what you need to know followed by context and analysis on news of the day each evening. Plus, Bloomberg Weekend. Start every morning with what you need to know followed by context and analysis on news of the day each evening. Plus, Bloomberg Weekend. Plus Signed UpPlus Sign UpPlus Sign Up By continuing, I agree to the Privacy Policy and Terms of Service. Crusoe said the agreement reflects its approach to building AI infrastructure without necessarily being dependent on the local grid, something the Trump administration has called for as well. The data center developer -- which is involved in the massive Stargate project -- said its arrangement with Form will protect ratepayers from cost increases and strengthen grid reliability. Long-duration storage remains a niche product, though, and has yet to be deployed at a wide scale. The rush to line up electricity to power data centers is boosting interest in emerging technologies such as Form's iron-air batteries, which can store and discharge electricity for up to 100 hours. Developers see energy storage as a tool that can help get data centers online faster -- and potentially without needing to rely on constrained power grids. The vast majority of batteries being installed are lithium-ion, which can typically discharge four hours of power. Long-duration storage can help operators tap power during extended periods of grid stress when electricity prices typically skyrocket. The batteries for Crusoe's data centers will be manufactured at Form's factory in West Virginia, which is ramping up production, Jaramillo said. The startup expects its first energy-storage pilot system to come online this year in Minnesota and has over 75 gigawatt-hours of commercial projects under agreement. Jaramillo said Form's technology is cost-competitive with other resources, including natural gas, though he declined to provide specifics. Form has raised $1.2 billion in financing from investors that include Breakthrough Energy Ventures, TPG Rise Climate and Energy Impact Partners, and its in the middle of raising another round. The company has been laying the groundwork for an initial public offering that could come within 12 months, Jaramillo added.

Soaring AI demand spurs roll-out of long duration energy storage

Industry Insight from Reuters Events, a part of Thomson Reuters. March 24 - Surging power demand from data center developers has spurred interest in emerging long duration energy storage (LDES) technologies that can provide reliable clean power supplies day and night. Long duration energy storage can bank and dispatch more than eight hours of power, or even several days, helping to supplement intermittent renewable energy like solar and wind and reducing reliance on backup fossil fuel generation. Commercial energy storage deployment to date has been shorter duration and is dominated by lithium-ion batteries that benefit from years of cost reductions and technology improvements. The U.S. added a record 57.6 GWh of battery energy storage capacity in 2025, up 30% from 2024, but the vast majority had a duration of two to four hours, according to report published by the Solar Energy Industry Association (SEIA) and Benchmark Mineral Intelligence in February. CHART: US battery storage duration on the grid AI growth and dwindling grid capacity is now boosting the business case for alternative LDES technologies, sparking a number of large projects that will help demonstrate these emerging technologies. Power utility Xcel Energy last month announced a deal with Google to develop a multi-technology generation stack in Pine Island, Minnesota that includes iron air battery systems for LDES. Uncertain U.S. federal policy remains a concern but contracts for multi-day battery projects announced by utilities to improve system adequacy, such as Xcel Energy's project with Google, are "a sign that planners are beginning to treat LDES as part of their core capacity stack," Anna Siefken, North America Policy and Market director for industry group Long Duration Energy Storage Council, told Reuters Events. In the short term, shorter-duration lithium-ion batteries will continue to dominate, experts said. "Under current conditions, new LDES deployments are expected to be mostly delayed until after 2030, driven in part by supply ⁠chain constraints associated with Foreign Entity of Concern (FEOC) provisions," Santos Garza Romero, a director at consultancy Guidehouse, said. President Trump's One Big Beautiful Bill has kept tax incentives for battery energy storage mostly unchanged through 2033 but new stricter sourcing requirements for equipment and materials from FEOC countries including China introduce supply chain uncertainties and risks for the deployment of new LDES technologies. Download our exclusive report on how energy investors are capitalizing on soaring power demand. Developers also suffer from a lack of regulated reward mechanisms in the electricity markets for long-duration storage attributes, limiting their expansion compared to short duration systems, Pete Tillotson, senior analyst at Benchmark Mineral Intelligence, said. "The vast majority of merchant revenues now are rewarded on intraday and 2 to 3 day-ahead trading, which is a relatively short duration for LDES," he told Reuters Events. "You don't need 24 hours of storage to do that." Tech partners Xcel Energy's project with Google in Minnesota will bring 1.6 GW of clean energy to the grid, including solar and wind, and a 300 MW/30 GWh 100-hour iron-air battery system supplied by Form Energy. Google will cover the cost of new grid infrastructure and the combined power solution will provide firm capacity and strengthen grid reliability when needed, "even over multiple days," the utility said in a statement. Form Energy's LDES multi-day technology was first deployed at Great River Energy's Cambridge Energy Storage Project in Minnesota late last year. The battery deployment at the Google project in Minnesota is expected to start in 2028. "Multi-day storage unlocks new capacity on the grid and enables the rapid buildout of AI infrastructure," Sarah Bray, spokesperson for Form Energy, told Reuters Events. Join hundreds of senior executives across energy, industry and finance at Reuters Events Global Energy Forum 2026. Google also announced plans this month to develop a new data center in DTE Energy's service territory in Michigan, to be served by 2.7 ⁠GW of new resources for the grid, including solar power, advanced storage and demand flexibility. Under the proposed agreement, 480 MW of energy storage will be developed, including 55 MW of LDES. The strong financial credentials and operational urgency of data center developers improve the bankability of LDES projects, the Long Duration Energy Storage Council said. State and federal governments are also pushing data center developers to bring their own power generation to curb power price increases for the wider public and this is encouraging talks about LDES in the context of swift deployment, resilience and affordability, Siefken said. Large long-duration projects can unlock significant unit-cost reductions for emerging LDES technologies, Zheng said. "Google's recently announced iron-air battery project exemplifies this," he said. "Its unprecedented scale enables projected costs well below lithium-ion equivalents, demonstrating how gigawatt-scale deployments can fundamentally shift the economics." Behind the meter AI growth is also opening up opportunities in behind-the-meter LDES. Zeo Energy, a Florida-based provider of residential solar, distributed energy and energy efficiency solutions, acquired long-duration storage company Heliogen in 2025, aiming to ⁠expand its market reach and supply solutions to power cloud computing, artificial intelligence, and data centers. Zeo Energy's acquisition of Heliogen added molten salt and compressed CO2 long-duration energy storage technologies to its portfolio of energy solutions. "We want to get into supplying a behind-the-meter energy solution 24/7 that these data centers need because the grid cannot give them enough power," CEO Tim Bridgewater told Reuters Events. CHART: Planned behind-the-meter power capacity - top 10 states In February, Zeo Energy signed a non-binding MoU to develop and supply 280 MW of baseload energy generation solution for Creekstone Energy's data center site under construction in Utah, combining solar power and long-duration storage. The company is in talks ⁠with companies over other commercial LDES projects in the planning and evaluation phase. "What we're looking for is providing the solutions that the data center developers need in a timely fashion and bringing financing and an engineering team that has expertise to design the feasibility study [and provide] the engineering around these long-duration storage opportunities," he said. Lithium leads While large-scale LDES projects will help establish these technologies in the commercial space, the dominance of lithium-ion batteries will continue in the coming years, aided by declining costs and technology advancements that are extending battery durations to as much as eight hours, experts said. Alternative technologies will chip away ⁠at the dominance of lithium-ion, reducing its share of the battery storage market from 98% in 2025 to 90% in 2030 as new technologies such as sodium-ion, zinc-based, metal-air and flow batteries gain momentum, according to the SEIA/Benchmark Mineral Intelligence report. For exclusive energy insights, sign up to our newsletter. Lithium-ion battery costs declined by more than 90% between 2010 and 2023, according to the International Energy Agency (IEA). Average global battery project costs were $125/kWh in December 2025, including $75/kWh for core equipment from China and $50/kWh for installation and connection, analysts at research group Ember said. Even for eight hours storage, alternative LDES technologies deployed outside of China can be over 60% more expensive than lithium-ion systems, without a significant step up in scale, Zheng noted. To close the cost gap, alternative LDES technologies will require "progress on both supply chain maturation and project scale," he said. --Editing by Robin Sayles * Suggested Topics: * Default Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Reuters Events, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News. Anna Flávia Rochas Anna is an energy reporter for Reuters Events, part of Reuters Professional. She also covers energy and agricultural commodity markets for Brazilian, North American and European news outlets.

AI boom catapults batteries into the mainstream

Why it matters: It's a marriage of urgent needs: The AI sector needs reliable power -- fast. Battery companies need deep-pocketed customers. Driving the news: Form Energy will provide its multi-day storage technology to data center developer Crusoe in an announcement made Tuesday at CERAWeek by S&P Global now underway in Houston. * Also Tuesday, Crusoe expanded an existing deal with Redwood Materials, another energy storage company. * These come on the heels of at least two other deals in the last few weeks committing to deploy novel battery technologies to power data centers, including a huge one with Form and Google. "We just see that the moment for batteries is really here," said Cully Cavness, co-founder and president of Crusoe. "It's ultimately about having more control of our timelines, taking our destination into our own hands." The big picture: The race for power is driving huge investments in a series of energy technologies, ranging from traditional natural gas to fusion, as the AI industry races to secure power that correlates with more AI compute capacity. Zoom in: Under the agreement announced Tuesday, Form will deliver 12 gigawatt-hours of multi-day energy storage by 2027. State of play: Cavness said the deal also reflects pressure from President Trump for tech companies to ensure the AI buildout doesn't drive up electricity costs for others. * Form CEO Mateo Jaramillo said the company's technology can help balance renewables and reduce overall system costs. How it works: Form Energy makes ultra-long batteries that store electricity by turning iron into rust -- and then reverse the process to release that energy days later. * The system relies on iron -- a cheap, widely available material -- instead of more expensive metals used in conventional lithium-ion batteries. Zoom out: Both executives -- in separate interviews Tuesday in Houston -- say deals like this could accelerate broader adoption of new energy technologies. * "It's important because it's a large load driver, but it's also an innovation driver," Jaramillo said. * Electric utilities can show they're able to pursue new business models like those incorporating long-duration energy storage, he added. * "We also have the opportunity to plant seeds of innovation and use purchasing power to create demand signals for future energy innovation," Cavness said. Yes, but: Form has a growing list of projects -- but only one factory (in West Virginia) so far, underscoring the challenge of scaling up. * "There are a lot of challenges as we go up the ramp-up," Jaramillo said. * A key one is balancing the timeline with the amount of added capacity, and not biting off too much too fast, he added. Reality check: Natural gas is still the most ascendant of any technology, according to Cavness. * "It's the power source that is most scalable and available today," he said. The intrigue: Combining storage and natural gas plants is "maybe an under-appreciated" part of the market, Jaramillo said. What's next: Both Crusoe and Form are eyeing the public markets. Crusoe is likely to go public this year, while Form's timeline is a little less clear but still in sight.