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LG Energy Solution Pivots to ESS as AI Data Centers Reshape Power Demand
Solar's coming dominance and AI electricity demand are turning grid-scale storage from an option into an operating necessity.
LG Energy Solution sees the electric vehicle slowdown as an opening to expand its energy storage system business, with AI data centers driving a surge in electricity demand that requires round-the-clock power, a company executive said on Friday (2026-05-29). Kim Hyun-tae, executive director of product planning, said an ESS boom is already underway in the United States because investment subsidies of at least 30% and as much as 60% are provided when ESS and renewable energy facilities are built together.5
Solar's ascent sharpens the storage imperative. BloombergNEF expects solar to become the largest source of power in the next decade, surpassing coal, oil and natural gas. By 2035, solar prices are forecast to drop another 30%, outcompeting coal and natural gas on cost.2 But solar generates only when the sun shines, and when renewables' share expands to about 50% of the grid mix, large-scale ESS will be needed to offset intermittency, Kim said, though he acknowledged costs are currently high.5
The IEA projects renewables investment will reach $2.2 trillion this year — more than double fossil fuel spending — accounting for over 40% of the $3.3 trillion estimated for the global energy sector.3 Solar spending leads within that figure. The scale of the buildout comes with a structural bottleneck: grids were not designed for this volume of intermittent capacity, and AI is set to widen the mismatch further.3
The IEA projects AI and data centers will account for as much as 4% of global electricity use by 2030, accelerating the urgency for new firm capacity.3 BloombergNEF expects gas and coal to provide 51% of incremental generation for data centers by 2050 precisely because of their around-the-clock availability.2
Solar wins on cost, but it cannot run a server farm at 3 a.m. without storage behind it. Big batteries received a commercial boost from Google, which included $1 billion worth of 100-hour batteries from Form Energy in a recent data center project.2 If long-duration storage scales, it rewrites the generation mix for data centers entirely; if costs stay prohibitive, gas-fired capacity remains online longer than the solar buildout alone would suggest.2
Coal is not stepping aside. It remains the world's largest source of electricity generation, accounting for roughly 35% of global supply despite the renewables surge, and over 2,000 GW of coal capacity remains operational worldwide as of 2024.1 China's state-run banks have handed out cheap loans, and local governments have competed to attract clean-energy firms — yet the country's coal fleet remains the backbone of its grid.4 The economics increasingly favour renewables in most markets, but retirement timelines depend on China's pace of transition.1
The ESS opportunity is not confined to any one market. In the United States, federal subsidies in the 30-to-60% range create a durable floor for battery deployment.5 In Asia, where coal-heavy grids face the fastest demand growth from AI infrastructure and manufacturing expansion, storage is the primary lever for integrating solar without building additional gas capacity.2
The rate of long-duration battery deployment is the forward signal worth tracking. If Form Energy's 100-hour model or comparable technologies clear the cost barrier, the fossil fuel share of data center power falls sharply from BloombergNEF's 51% forecast. If they do not, that forecast holds through 2050. Kim's pivot at LG Energy Solution is a bet that storage scales before gas consolidates its position as the backstop for AI power demand.2