Global UPS Capacity Additions in Data Centers to Reach 29.5 GW by 2034: Guidehouse Research Report

Guidehouse Research estimates annual UPS capacity additions in data centers will grow globally from 7.7 GW in 2025 to 29.5 GW in 2034, representing a 16.1% CAGR. Key drivers for ESS adoption include ensuring IT system resilience and operational cost management. Challenges to large-scale ESS adoption include high capital costs, policy uncertainty, integration challenges with aging grid infrastructure, and safety concerns around Li-ion batteries.

The global data center market is experiencing rapid growth, driven by increasing demand for cloud services, artificial intelligence, and machine learning. According to Guidehouse Research, annual UPS capacity additions in data centers are projected to grow from 7.7 GW in 2025 to 29.5 GW in 2034, representing a 16.1% CAGR [1]. Key drivers for this expansion include the need for IT system resilience and operational cost management.

Companies are investing heavily in data centers to meet surging demand. Blackstone Credit & Insurance (BXCI) has expanded its financing commitment to Aligned Data Centers to over US$1 billion, supporting the development of more than 5GW of planned capacity across the Americas [2]. Similarly, Google plans to invest $9 billion in Virginia, including developing a new data center and expanding two existing facilities in Northern Virginia [3]. CoreWeave, Inc. (CRWV) has also raised its full-year revenue outlook, projecting 2025 revenues in the range of $5.15 billion to $5.35 billion, up from the previous guidance of $4.9 billion to $5.1 billion, reflecting continued strength in customer demand [4].

However, large-scale adoption of energy storage systems (ESS) faces several challenges. High capital costs, policy uncertainty, integration challenges with aging grid infrastructure, and safety concerns around lithium-ion batteries are among the key obstacles. The recent fire at a data center in South Korea, which knocked out key digital services for days, highlights the safety concerns surrounding lithium-ion batteries [5].

To address these challenges, companies are exploring alternative solutions. For instance, CoreWeave is investing in data centers and server infrastructure to keep pace with the ongoing traction in customer demand. Additionally, Microsoft (MSFT) is leading the way in cloud infrastructure through Azure, rapidly expanding in AI infrastructure and transforming every Azure region into an AI-first environment [4].

In conclusion, the global data center market is poised for significant growth, driven by increasing demand for cloud services and AI. However, the adoption of energy storage systems faces several challenges that need to be addressed to ensure resilience and operational cost management.

References:
[1] https://thetechcapital.com/blackstone-upsizes-aligned-data-centers-loan-to-over-1-billion/
[2] https://www.costar.com/article/394047264/google-to-invest-9-billion-in-virginia-ai-cloud-data-centers-as-space-becomes-scarce
[3] https://finance.yahoo.com/news/coreweaves-upbeat-outlook-expanding-data-132600510.html
[4] https://www.datacenterknowledge.com/business/data-center-fire-triggers-lithium-ion-battery-doubts-for-south-korea