US data center construction spending reached $28.3 billion in 2024 — tripling over the last three years, according to Goldman Sachs Research. As buildout accelerates, demand for large volumes of power is rising on short timelines. The rapid growth in data centers is creating a surge in energy demand that threatens to overload the US energy grid.

Currently, lithium-ion (LI) batteries are one of the main battery technologies being considered for data centers. However, these batteries are highly flammable and pose safety concerns for the communities around them, leading to community pushback on their development in many places.

While fires are uncommon and LI batteries are subject to rigorous safety testing, when fires do occur, they tend to make national news and damage the public reputation of the energy storage industry as a whole.

Developers should consider non-flammable battery options for data center build-outs. Flow batteries are a strong solution, since they are a mature but as-yet underutilized energy storage technology available on the market that is non-flammable, making them better suited for data center projects located near densely populated areas.

The role of flow batteries in the AI data center boom

AI data centers are subject to sudden, often significant load fluctuations due to the nature of unpredictable user demand for electricity, extreme weather, utility company disruption, equipment malfunction, and other factors. Flow batteries are ideal for this use case because they can operate across the entire state-of-charge range, even with frequent cycling, without rapid wear and with minimal impact on degradation.

Flow batteries are well-suited for large-scale long-duration energy storage and continuous cycling, making them a natural fit for data center applications over lithium-ion batteries. Additionally, the non-flammability and overall safety features of flow batteries are advantageous for critical applications like hospitals.

Flow batteries have a rapid response time that is equivalent to or faster than that of lithium-ion batteries. Grid-scale LI batteries usually average 50-100 milliseconds to respond to grid demand. In comparison, emerging flow battery technologies have demonstrated response times of <10 milliseconds. Flow battery pumps only need to operate in one direction, allowing for rapid charge/discharge switching in response to user needs.

Lithium-ion batteries tend to degrade more rapidly than flow batteries when subjected to frequent cycling, making them less viable for data center use cases. Grid interaction is also a selling point - flow batteries are able to support consistent power for critical loads like data centers without disrupting other local loads like residential and commercial buildings, or contributing to higher energy prices. With US energy bills increasing 11 percent since the end of January 2025, flow batteries’ ability to guard against price volatility is a key value proposition for broader consumers.

Low-levelized cost of storage (LCOS) is also an important factor when considering AI data center build-outs. Compared to LI batteries and other emerging non-lithium battery options, the LCOS for flow batteries could see a significant reduction by 2030. A 2025 report by the US Department of Energy also found that increased awareness and investment in organic flow batteries over the years will improve affordability.

Grid-scale flow batteries can require less space than LI batteries. LI systems must be spaced apart for fire safety, whereas flow batteries can use large, tall tanks that take up four times less land area than the equivalent lithium iron phosphate (LFP) battery facility. They can also be stacked on top of each other or placed safely inside a building.

There is also a strong redevelopment opportunity. Organic-electrolyte flow batteries can be sited in repurposed oil refineries and tank farms, since they use non-hazardous electrolytes that can be stored in standard steel tanks. By reusing infrastructure already designed for chemical storage, developers can save time and money on installation, avoid the cost of new tanks, and reduce civil works. Vanadium systems cannot use these sites in the same way because their chemistries are not compatible with typical petroleum infrastructure.

Last but not least, flow batteries also offer extended lifetimes of 20 years or more, since flow batteries’ electrolytes do not degrade the way lithium-ion materials do.

How AI demand is influencing investment trends

AI demand is pushing financiers and strategic investors toward renewable solutions, as well as natural gas-based options. While some US battery projects are being put on hold or canceled due to policy shifts, the International Energy Agency claims that new renewable energy generation capacity in the US is expected to reach 250GW by 2030. This indicates continued demand for large-scale, long-duration storage solutions to support this growth, particularly across energy-intensive critical industries.

On top of that, almost 23 percent more energy storage capacity is set to be installed globally in 2025 than in 2024. Although China dominates the energy storage market, the US is in second place, and factors like domestically-sourced battery materials, lower infrastructure costs, and the need for more grid resilience make investments into US-made batteries more attractive to potential investors. There’s a sizable shift toward systems that are built for performance in specific use cases rather than a one-size-fits-all battery design. In the US, that means focusing on infrastructure-grade storage that supports grid flexibility and reliability—especially for data centers and other high-load environments.

As data centers become the backbone of the digital economy, infrastructure spending is projected to surpass $1.7 trillion by 2030, and that growth will demand a broader mix of energy storage technologies, with non-lithium systems expected to play a critical role in ensuring reliability, cost efficiency, and long-duration performance.

There is additional optimism for growth when looking at US policy regulations, as well. The Texas Senate Bill 6, which took immediate effect in Texas on June 21, 2025, is set to improve state electrical grid reliability by requiring large load consumers such as data centers to minimize stranded infrastructure costs through financial commitments. The bill also gives the Electric Reliability Council of Texas (ERCOT) the authority to turn down large flexible loads. This is just one example of how regulators are preparing to manage hyperscale demand, and it’s likely other states will follow suit with similar measures. Flow batteries are one of the few tools that allow operators to comply without sacrificing uptime.

True resilience isn’t just about being a flexible load but having a flexible infrastructure capable of storing, shifting, and dispatching energy as needed.

This is the first step in a broader regulatory shift where flow batteries can serve as a bridge technology that enables growth in AI and hyperscale data centers while maintaining grid stability. Many data center operators are concerned that curtailment will become a more common tool. But many long-duration flow batteries already provide compliance without relying on curtailment, which is a growing concern for operators. Long-duration flow batteries can mitigate that risk by providing compliance and reliability without forcing operators into costly interruptions.

As regulatory scrutiny increases, operators and developers will need solutions that not only scale but also meet compliance requirements. This is where flow batteries will play a defining role throughout the AI boom.

Ian Rock, the CTO of Terraflow, contributed to the writing of this article.