Rapid growth in artificial intelligence (AI) data centers is driving new demand for medium-voltage uninterruptible power supply (UPS) systems that incorporate battery energy storage systems (BESS), industry participants told Fastmarkets. These grid-interactive UPS solutions help data centers ride through voltage faults without disconnecting from the grid, while also supporting broader grid stability.
Fastmarkets forecasts that energy storage demand directly linked to AI data center electricity consumption could reach 300 GWh by 2030, fueled by rising power needs and the shift toward grid-interactive backup systems. In the United States, overall electricity consumption is projected to rise by 5% in 2026, with data centers potentially accounting for up to 12% of total use by 2028.
Traditional low-voltage UPS units isolate data centers from the grid during voltage dips, risking destabilization if large loads disconnect. Medium-voltage UPS installations, by contrast, use utility-scale lithium-ion BESS to maintain continuous power during transients and seamlessly return to grid supply once voltage stabilizes. This architecture addresses two distinct requirements identified by experts: long-duration storage for baseload operation and rapid power-quality management to handle fast switching by AI compute hardware.
“Large AI workloads generate high swings in demand that traditional UPS can’t manage,” explained Marek Kubik, co-founder of Fluence. “Medium-voltage UPS with integrated BESS provides both ride-through capability and power-quality control.”
ON.energy, a medium-voltage UPS provider, has demonstrated multi-gigawatt projects in operation or under construction across the United States. “Our systems ensure that data center loads remain online through grid disturbances and return to nominal operation immediately after a fault clears,” said Nitish Garg, senior director of procurement at ON.energy.
Lithium iron phosphate (LFP) is expected to remain the dominant cell chemistry for stationary storage, accounting for roughly 80% of shipments by 2036, according to Fastmarkets research. The surge in stationary storage demand is also prompting some battery manufacturers to convert electric-vehicle cell capacity to ESS production, tapping into a market not fully reflected in traditional lithium demand estimates.
Source: Fastmarkets Insights
