Delays in connecting to the U.S. power grid, causing multi-year waits in most regions, map neatly against the increase in data center investments in on-site power.
That can include generation (including solar PV and backup gas or diesel generators), conventional UPS systems, and large-scale battery energy storage.
Across that portfolio, one layer determines how well the entire system performs: power conversion and controllable power delivery. Power conversion systems (PCS), transformers, switchgear, and controls govern how electricity moves between sources and critical loads — and how smoothly the site rides through disturbances.
Energy storage can cover generation gaps and provide flexibility. But it delivers the most value when it is fully integrated into a broader power architecture and operating strategy.
When evaluating such high-ticket items, data center operators should prioritize solutions that support fast commissioning and reliable long-term operation. Batteries need to integrate cleanly with the power conversion equipment, controls, and UPS. And they must meet local safety and compliance standards.
Meeting the power challenge with a diverse portfolio
Data centers already consume over 4.4% of U.S. electricity. That’s projected to rise in three years to anywhere from 6.7% to 12%, as AI adoption races forward.
The AI pioneers building these data centers now feel the pain of everyone who has worked on electric transmission and reliability for decades: having to connect to a power grid with outdated infrastructure and a flagging ability to respond to the first growth in a generation in demand, especially at peak times when the cost of capacity spikes.
The U.S. currently plans to retire 104 gigawatts (GW) of firm generation by 2030, just as a gap in new supply looms. Of the 154 GW in advanced development, only 19 GW can operate 24/7.
According to Open AI, the U.S. needs 100 GW a year in new electrons.
This will not happen overnight, so data centers must invest now in self-powering solutions to maintain 24/7 operations and hold down rapidly rising costs.
Policy challenges
Cuts to the tax incentives in the Inflation Reduction Act have increased uncertainty and costs for those pursuing solar and energy storage.
State and local programs can help. California’s Self-Generation Incentive Program (SGIP) advantages battery storage and other clean energy investments. But not every state has a similar tool.
In some states, on-site power can be a stepping stone to participating in grid services that support overall reliability, such as frequency regulation, demand response, and peak load management.
Flexible, controllable resources can respond to these market opportunities and offset the cost of on-site power.
However, the regulatory environment remains fragmented, and timelines for permitting and interconnection vary widely.
Evaluating on-site power
In addition to addressing the grid problem, modern on-site power systems offer compelling operational advantages for data centers.
As utility-scale and commercial applications expand, manufacturers have refined the underlying power stack — including PCS, controls, and batteries — for higher efficiency, longer service life, and easier commissioning.
However, such complex systems can introduce risks if not properly designed, commissioned, and maintained. No single asset makes the difference: It’s whether the power conversion and control layer can coordinate multiple resources — including UPS systems, solar PV, other generation, and batteries — while maintaining power quality and predictable transitions.
Data center operators should evaluate:
Essential safety and health regulations to follow
Certifications and code compliance are foundational. Securing approval from Authorities Having Jurisdiction (AHJs) directly impacts uptime and insurability, as well as safety.
The UL 9540 standard covers integration of batteries, power conversion, and control software, while UL 9540A tests battery behavior during thermal runaway, including fire spread and gas release.
At the component level, UL 1973 ensures battery modules and packs meet electrical, mechanical, and environmental safety standards, reducing internal failures.
At interconnection, standards such as UL 1741, IEEE 1547/1547a, and CSA C22.2 verify that inverters and PCS connect reliably and safely to the grid, maintaining voltage and frequency response while preventing unsafe islanding.
Fire marshals, insurers and emergency responders must also be satisfied. Adherence protects facilities teams, and reduces operational risk.
Security and resilience in a volatile world
As data centers become more critical to national infrastructure, they face heightened risks from extreme weather, and physical disruptions. Operations that rely solely on long-distance transmission may have more to fear.
Some on-site power systems allow for autonomous operation during grid disturbances, increasingly common as power becomes less reliable overall.
Batteries work best when evaluated as one module within an overall power architecture. In addition to cost and long life, managers must consider safety, energy efficiency, commissioning complexity, and how well they integrate with UPS systems, generators, and the site’s power conversion and control layer.
Andy Han is the Director of ESS Technical Solutions and Engineering at Sungrow North America, where he specializes in the design and deployment of grid-scale energy storage and power conversion systems.
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