Batteries, Not Natural Gas, Can Power the Data Center Boom (e360.yale.edu)

U.S. electricity demand, long flat, is poised to surge—estimates show roughly 25% growth this decade—largely driven by AI-hungry data centers. Utilities and tech firms are responding by siting new natural‑gas turbines next to facilities, a strategy that raises emissions and bills. Clean‑energy advocates and some regulators now argue for a different path: behind‑the‑meter batteries and active demand curtailment. Batteries can be charged when prices are low and discharged during short, weather‑driven peaks (roughly 10–20 hours a year), earn capacity payments, provide daily grid services, and potentially pay back in ~15 years—advantages that small, infrequently run gas plants (costs can hit ~$100/MWh) do not offer. Technically, the U.S. grid normally has ~400–450 GW demand with spare capacity of 200–300 GW, and peaks under 800 GW, so most growth can be absorbed without new thermal plants. Deploying storage and flexibility could meet growth at a fraction of the $550B growth component of projected utility spending ($1.1T total through 2029), reduce consumer bills (Shah cites a ~5% cut), and speed decarbonization by pairing batteries with wind/solar or funding neighbor‑weatherization. The debate has political stakes—public pushback has already stalled some data center projects—so regulators, incentives (battery credits remain through 2034), and operator strategies will shape whether data centers rely on gas or grid‑integrated storage.