Data Center Energy Storage Market Size, Share & Trends Analysis Report By Type (Tier 1, Tier 2, Tier 3, Tier 4), By Application, By Region, And Segment Forecasts, 2024 - 2030

Report Overview

The global data center energy storage market size was valued at USD 1.48 billion in 2023 and is projected to grow at a CAGR of 9.1% from 2024 to 2030. The increasing demand is driven by the exponential growth in data generation and the need for uninterrupted operations. As more businesses and industries transition to digital platforms, the volume of data processed and stored has surged, leading to the expansion of data centers worldwide. These facilities require reliable and efficient energy storage systems to ensure continuous operation, even during power outages or fluctuations. The integration of renewable energy sources, such as solar and wind, into data center operations further emphasizes the need for advanced energy storage solutions to manage energy supply variability.

Additionally, the growing adoption of hybrid and multi-cloud architectures is driving the need for more flexible energy storage solutions. As organizations increasingly manage workloads across multiple cloud environments, data centers must handle more complex and dynamic power demands. Energy storage systems that can scale quickly and efficiently in response to these varying loads are becoming more critical. This need for adaptability is pushing data center operators to invest in advanced energy storage technologies, such as lithium-ion batteries and other next-generation storage systems, that offer greater energy density and faster response times.

The heightened focus on grid resilience and stability further drives demand. As data centers consume significant global electricity, their energy usage can strain local grids, particularly during peak demand periods. By integrating energy storage systems, data centers can smooth out their energy consumption and support grid stability by participating in demand response programs. These programs allow data centers to store excess energy during off-peak hours and release it during peak times, reducing the grid's burden and generating additional revenue.

Moreover, advancements in energy storage technology itself are fueling demand. Innovations in battery technology, such as improved energy density, longer lifespan, and enhanced safety features, are making energy storage systems more viable and cost-effective for data centers. As these technologies become more accessible, data centers increasingly adopt them to improve energy efficiency and reduce operational costs. Lastly, rising energy costs and volatility are compelling data center operators to seek energy storage solutions to mitigate financial risk. By storing energy when prices are low and using it when prices spike, data centers can better manage their energy costs, leading to more predictable and stable operational expenses. This financial incentive and the need for operational reliability and sustainability drive the global demand for data center energy storage systems.

Type Insight

The tier 3 segment held the largest market revenue share of 45.4% in 2023. Tier 3 data centers provide redundant capacity components and multiple independent distribution paths, allowing them to support critical operations with high availability. As businesses increasingly rely on digital infrastructure for essential services, the need for data centers that can ensure minimal downtime becomes crucial. Additionally, the rise in cloud computing, edge computing, and big data analytics drives the demand for more resilient energy storage solutions, further contributing to the growth of the tier 3 segment.

The tier 4 segment is projected to grow at the fastest CAGR of 10.3% over the forecast period. Tier 4 data centers are designed to offer the highest level of fault tolerance, ensuring that systems remain operational despite multiple component failures. As businesses and industries increasingly rely on data centers for essential operations, especially in finance, healthcare, and cloud services, the demand for Tier 4 facilities that can provide uninterrupted service is rising. Expanding edge computing and IoT applications, which require low latency and highly reliable data processing, further boosts the need for Tier 4 data centers with robust energy storage solutions.

Application Insights

The BFSI segment dominated the market in 2023. As financial institutions expand their digital services, they require robust data centers capable of handling high volumes of transactions and data storage. Energy storage solutions in data centers ensure operational continuity during power outages and help manage energy costs, which is critical for the BFSI sector, which operates 24/7 and cannot afford downtime. Additionally, the growing adoption of cloud services and digital banking platforms further drives the need for reliable and efficient energy storage solutions to support the BFSI industry's complex and critical infrastructure.

The entertainment & media segment is projected to grow at the fastest CAGR over the forecast period. The increasing demand can be attributed to the rapid expansion of digital content consumption, streaming services, and online gaming. These activities require significant data processing and storage capabilities, which drive the need for robust and reliable energy solutions in data centers. As consumers continue to shift towards high-definition video streaming and real-time interactive entertainment, the infrastructure supporting these services must handle higher loads with minimal downtime. Energy storage solutions become crucial to maintaining the operational efficiency of data centers, ensuring that they can meet the growing demands of the entertainment and media industry without interruptions.

Regional Insights

North America held the largest market revenue share of 39.5% in 2023. The increasing demand is driven by the region's rapid growth in data center construction, fueled by the expansion of cloud computing, edge computing, and the rise of big data. As more businesses shift towards digital operations, there is a heightened need for reliable power sources to ensure uninterrupted services, especially given the region's vulnerability to power outages and natural disasters. Additionally, regulatory pressures for energy efficiency and integrating renewable energy sources encourage data centers to adopt advanced energy storage solutions to reduce carbon footprints and manage energy more effectively.

U.S. Data Center Energy Storage Market Insights

The U.S. held the largest market revenue share regionally in 2023. The increasing demand for data center energy storage in the U.S. is driven by the rapid growth of data centers due to the expansion of cloud computing, big data analytics, and the rise in digital services. The U.S. government’s emphasis on renewable energy integration and sustainability initiatives also encourages data centers to adopt energy storage systems to reduce their carbon footprint and enhance energy efficiency.

Europe Data Center Energy Storage Market Insights

Europe market is anticipated to witness significant growth in the coming years. The growing adoption of edge computing across Europe requires localized energy solutions, including storage, to ensure low latency and high availability, even in decentralized and remote data centers. Moreover, the EU's emphasis on innovation and technology leadership in sectors such as artificial intelligence and 5G is prompting data centers to expand capacity, further increasing the need for reliable and scalable energy storage solutions to support these advanced technologies.

The UK market is projected to witness significant growth in the coming years. The demand for data center energy storage in the UK is rising due to the increasing reliance on digital infrastructure, driven by the rapid growth of cloud computing, e-commerce, and data-intensive industries. Additionally, the UK's focus on sustainability and reducing carbon emissions has led to adopting renewable energy sources, which are intermittent by nature. This shift necessitates advanced energy storage solutions in data centers to ensure reliability and efficiency.

Asia Pacific Data Center Energy Storage Market Insights

Asia Pacific is expected to grow at the fastest CAGR over the forecast period. The region's ongoing urbanization and the associated rise in smart cities require robust and scalable data infrastructure. This has accelerated the need for energy-efficient and resilient data centers, pushing the adoption of advanced energy storage solutions. Additionally, the region's frequent power outages and grid instability, particularly in countries such as India and Indonesia, have highlighted the necessity of reliable energy storage systems to ensure continuous data center operations.

India market is anticipated to grow prominently over the forecast period. The rapid expansion of the country's IT infrastructure drives the market growth. The rise in data localization regulations by the Indian government, which requires companies to store data within the country, has led to a surge in the construction of data centers, necessitating robust energy storage solutions to manage power supply efficiently. Furthermore, the increasing urbanization and the expansion of smart cities across India have created a demand for data centers that can handle high energy loads, making energy storage systems critical for ensuring energy efficiency and grid resilience.

Key Data Center Energy Storage Company Insights

Some key companies in the data center energy storage market include ABB; Delta Electronics, Inc.; Eaton; General Electric Company; Huawei Technologies Co., Ltd.; and others.

• ABB's provides a completely digitalized energy storage lineup that enhances grid efficiency at every stage by providing factory-assembled, pre-tested solutions that ensure rigorous quality control for maximum safety. ABB's solutions can be directly implemented on the customer's premises, resulting in quicker installation, reduced project completion time, and increased cost savings for clients.

• Delta Electronics, Inc. offers a lithium battery energy storage system (BESS) that includes a full system design featuring high energy density, battery management, multi-level safety protection, and an outdoor cabinet with a modular design. In addition, it complies with the international standards utilized in Europe, America, and Japan.

Recent Developments

• In June 2024, Legrand announced the acquisition of two companies Davenham an Irish low-voltage power distribution system provider, and VASS an Australian busbars provider company. This acquisition aims to expand its data center power offering and to improve the White space offerings.

• In June 2024, Vertiv Group Corp. announced a strategic partnership with Ballard Power Systems to develop hydrogen-powered fuel cell solutions for data centers in North America and EMEA. The collaboration aims to provide zero-emission backup power, integrating Ballard’s fuel cells with Vertiv’s infrastructure, including lithium-ion batteries and uninterruptible power systems.

Data Center Energy Storage Market Report Scope

Global Data Center Energy Storage Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the data center energy storage market report based on, type, application, and region:

• Data Center Energy Storage Market Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Tier 1

  • Tier 2

  • Tier 3

  • Tier 4

• Data Center Energy Storage Market Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Healthcare

  • BFSI

  • Manufacturing

  • Retail & E-commerce

  • Entertainment & Media

  • Others

• Data Center Energy Storage Market Regional Outlook (Revenue, USD Million, 2018 - 2030) 

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Argentina

  • Middle East and Africa (MEA)

    • Saudi Arabia

    • South Africa

    • UAE