Key drivers for ESS adoption include the need for IT system resilience and operational cost management

BOULDER, Colo., Aug. 28, 2025 /PRNewswire/ -- A new report from Guidehouse Research analyzes the global market for energy storage systems (ESS) in data centers.

The market is defined by both established use cases and emerging opportunities. Short-duration uninterruptible power supplies (UPS) are nearly ubiquitous in data centers today, while interest in longer-duration, large-scale ESS is growing—particularly among hyperscalers seeking to meet energy goals. According to a new report from Guidehouse Research, annual UPS capacity additions in data centers are expected to grow globally from 7.7 GW in 2025 to 29.5 GW in 2034, representing a CAGR of 16.1%.

"As global data center development accelerates, the UPS market is expected to grow in tandem, while large-scale ESS adoption will depend on overcoming physical, financial, and policy-related constraints," said Grant Samms, research analyst with Guidehouse Research. "However, high costs, regulatory uncertainty, scalability limitations, and aging grid infrastructure pose significant challenges, especially for long-duration energy storage (LDES)."

Several key factors are driving ESS adoption in data centers, led by the need to ensure IT system resilience and reliability, which underpins the widespread use of UPS. Resilience goals are also fueling interest in large-scale ESS as operators work to reduce emissions and integrate renewable energy, while cost management opportunities such as peak shaving, load shifting, and participation in grid services markets add further incentive. However, significant barriers remain—particularly for LDES—including high capital costs, policy uncertainty such as trade actions and incentive volatility, and integration challenges with aging grid infrastructure. Safety concerns around Li-ion batteries, though beginning to ease, still contribute to hesitancy among some operators, according to the report.

The report, Energy Storage Systems for Data Centers, analyzes the market for energy storage systems in data centers over the next decade. Analyses are segmented by world region, storage technology, and data center tier, and include both capacity and revenue projections. An executive summary of the report is available for free download on the Guidehouse Research website.

About Guidehouse Research

Guidehouse Research, the dedicated market intelligence arm of Guidehouse, provides research, data, and benchmarking services for today's rapidly changing and highly regulated industries. Our insights are built on in-depth analysis of global clean technology markets. The team's research methodology combines supply-side industry analysis, end-user primary research, and demand assessment, paired with a deep examination of technology trends, to provide a comprehensive view of emerging resilient infrastructure systems. Additional information about Guidehouse Research can be found at guidehouseresearch.com.

About Guidehouse

Guidehouse is a global AI-led professional services firm delivering advisory, technology, and managed services to the commercial and government sectors. With an integrated business technology approach, Guidehouse drives efficiency and resilience in the healthcare, financial services, energy, infrastructure, and national security markets. Built to help clients across industries outwit complexity, the firm brings together approximately 18,000 professionals to achieve lasting impact and shape a meaningful future. guidehouse.com

* The information contained in this press release concerning the report, Energy Storage Systems for Data Centers, is a summary and reflects the current expectations of Guidehouse Research based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report's conclusions and the methodologies used to create the report. Neither Guidehouse Research nor Guidehouse undertakes any obligation to update any of the information contained in this press release or the report.

For more information, contact:

Cecile Fradkin for Guidehouse Research
+1.646.941.9139
cfradkin@scprgroup.com 

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SOURCE Guidehouse Research