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UBS: AI Data Centres to Power Global Energy Storage Boom Over Next Five Years

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The surge in AI data centre power demand across the United States is set to trigger a “boom cycle” for energy storage over the next five years, according to a new report from UBS Securities.

UBS analyst Yan Yishu, speaking at a media briefing in Hong Kong, said global energy storage demand could grow 40% year-on-year in 2026, as the U.S. grid increasingly depends on batteries to manage fluctuations from wind and solar power.

“The demand for AI data centres in the U.S. is very robust, but electricity is the biggest bottleneck,” Yan said. As renewables remain the only U.S. power segment expected to expand significantly in the coming years, large-scale energy storage systems will be critical to balancing intermittent supply with rising consumption.

The U.S. remains a key market for Chinese energy storage firms, which hold about 20% market share there, drawn by high profit margins. However, Yan warned that President Trump’s One Big Beautiful Bill, which restricts Chinese participation in U.S. energy infrastructure, could pose serious risks to future exports.

Meanwhile, emerging markets including the Middle East, Latin America, Africa, and Southeast Asia are expected to record 30–50% growth rates or higher as renewable integration accelerates.

In China, policy reforms encouraging market-based electricity pricing are also driving new storage investments. Yan noted that a peak-to-valley price gap of 0.4 yuan ($0.06) per kWh is already enough to make standalone storage projects profitable. UBS expects provincial governments to introduce capacity payments, rewarding battery operators for availability during peak demand, further fueling growth.

Talen Energy and Amazon Partner on Nuclear Power Deal to Fuel AWS Data Centers

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U.S. utility Talen Energy announced an expanded partnership with Amazon to supply up to 1,920 megawatts of carbon-free electricity from its Susquehanna nuclear plant in Pennsylvania to Amazon Web Services (AWS) data centers. The long-term agreement, lasting until 2042, provides Talen with a stable revenue stream while supporting Amazon’s growing energy needs for AI and cloud operations.

Both companies are also exploring the construction of new Small Modular Reactors within Talen’s Pennsylvania footprint and considering expanding the existing nuclear plant’s capacity. This deal comes amid rising U.S. electricity demand for data centers and AI workloads—the first increase in two decades—pushing Big Tech firms to secure reliable and sustainable power sources.

Earlier this month, Constellation Energy reached a similar deal with Meta Platforms to keep an Illinois nuclear reactor operational for 20 more years.

Following the announcement, Talen Energy shares rose nearly 8% in premarket trading.

Kevin Miller, AWS vice president of global data centers, highlighted the investment’s local economic impact, calling it the largest private sector investment in Pennsylvania’s history with $20 billion committed and 1,250 high-skilled jobs created. Miller also emphasized AWS’s commitment to powering its infrastructure with carbon-free energy through this collaboration.