Data Centres and the Energy Boom Ahead

A quiet revolution is forming beneath the hum of servers. As the world’s data centers multiply to meet the hunger of artificial intelligence, they are triggering something far more fundamental — a global surge in energy storage.

According to a new report by UBS Securities, the rise of AI-driven data infrastructure in the United States is set to ignite a “boom cycle” in energy storage within the next five years. The bank’s analysts predict that as demand for clean, steady power increases, the world will need an unprecedented level of storage capacity to balance the flow of renewable energy from wind and solar farms.

“Electricity is becoming the new constraint,” said UBS Securities analyst Yan Yishu, speaking at a media briefing in Hong Kong. “The demand for AI data centers in the U.S. is very robust, but electricity is the biggest bottleneck.”

UBS forecasts that global energy storage demand could climb 40% year-on-year by 2026, marking one of the fastest growth phases in the renewable power chain. While the U.S. remains the key market — driven by data center clusters in states like Virginia, Texas, and Arizona — analysts expect emerging economies across the Middle East, Latin America, Africa, and Southeast Asia to see the highest percentage growth, often exceeding 50% annually.

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Powering the AI Age

The rapid expansion of artificial intelligence has changed what it means to power a modern economy. Each AI model requires massive computing operations that run continuously, consuming enormous amounts of electricity.

As traditional fossil fuel systems decline, renewables are the only energy segment expected to grow significantly in the next five years in the United States. Yet wind and solar energy fluctuate with weather and daylight, forcing grids to rely increasingly on batteries that can store excess energy and release it when needed.

This evolving landscape has created new opportunities — and new vulnerabilities. “Energy storage has become the invisible infrastructure of the digital era,” said an energy strategist at UBS, noting that every major technology trend from AI to electric vehicles is converging on the same power challenge: stability.

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China’s Place in the Equation

Despite geopolitical headwinds, Chinese energy storage manufacturers still hold around 20% of the U.S. market, according to UBS. The sector’s high profit margins have made it attractive for Chinese exporters, but that balance could shift as trade restrictions tighten.

Under President Donald Trump’s “One Big Beautiful Bill”, a series of new rules label certain foreign entities as national security risks, placing limits on Chinese participation in key parts of the American energy sector. UBS analysts warn that these restrictions could slow exports, raise costs, and encourage U.S. companies to develop domestic or allied-nation supply chains instead.

Yet even as barriers rise, China’s domestic energy industry continues to evolve. The government is moving toward market-based electricity pricing, which allows energy storage projects to profit from timing — buying power when prices are low and selling it during peaks.

UBS expects several Chinese provinces to roll out “capacity payments”, rewarding battery operators for keeping power available on demand. With a 0.4 yuan ($0.06) per kilowatt-hour gap between peak and off-peak rates, independent storage systems are already finding profitability.

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The Global Storage Economy

This growing interdependence between digital demand and renewable supply is rewriting the investment map. What began as an environmental push to decarbonize grids has turned into an economic race to control storage capacity.

Investment banks and institutional funds are now treating energy storage as a new asset class — one that sits at the crossroads of technology, real estate, and infrastructure. Analysts compare it to the early internet buildout, when companies raced to build the backbone of a coming digital age.

For UBS, the coming half-decade will define whether nations can meet the energy needs of intelligent machines without breaking their grids. “Data centers are the new factories,” said Yan. “They’re changing not just technology, but the power economy that supports it.”

In this transformation, batteries are becoming the silent engines of progress — the unseen vaults holding tomorrow’s energy, waiting for when the world’s servers wake up.