Rapid Growth in Data Centers a Boon for Lithium Batteries

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Data centers now rely on lead-based batteries for back-up
  • BNEF estimates lithium will capture 33% market share by 2025

Annual data center lithium-ion penetration in North America and Europe, 2016-25 (GWh)

Source: Bloomberg New Energy Finance

Data centers are the major purchasers of lead-based batteries which improve the power quality and provide instantaneous back-up power. This is a rapidly growing market: demand for battery back-up in data centers across North America and Europe will quadruple between 2016 and 2025, rising from 3.5 to 14 gigawatt-hours. A smaller number of ‘hyperscale’ data centers, operated by companies such as Google, Apple, Amazon, Facebook and Microsoft will dominate the data center market in the coming years. Lithium-ion batteries are an attractive alternative to the incumbent technology and their market share will increase from 1 to 35 percent over this period.

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