AI data centers boost BTM battery storage opportunities as Goldman raises storage demand forecasts and updates NRGV valuation

Overview

This report focuses on the behind-the-meter battery energy storage opportunity created by AI data centers. Goldman Sachs believes that the rapid increase in data center scale and rack power density, combined with bottlenecks in grid interconnection, labor, and available power supply, makes onsite generation and battery storage a short-term bridging solution and potentially a long-term backup power option. The report also updates the global battery storage supply-demand model and discusses the stock-specific implications for FLNC and NRGV.

Core views

The core view is that the value of BESS in data centers comes not only from traditional renewable energy pairing, load shifting, and ancillary services, but also from managing millisecond-level power fluctuations under AI workloads, rapid deployment, power quality, and backup power. Goldman Sachs expects global battery storage installations to reach about 2,104GWh by 2040, with global installations in 2027E growing about 30% year over year. Demand forecasts for the U.S., EMEA, and Australia were all raised, with total U.S. BESS deployment in 2030E increased from 112GWh to 172GWh.

Analysis framework

The report uses a thematic research plus supply-demand model update approach: it first assesses the market opportunity from AI data center power demand, BTM power bridging needs, and BESS technology characteristics; then maps that opportunity across supply chain segments including batteries, system integration, electrical balance-of-system, energy storage platforms, and alternative long-duration storage technologies; and finally translates the thematic impact into forecasts and valuations for covered companies such as FLNC and NRGV.

Methodology notes

• Industry supply-demand modelBattery storage supply/demand model

  Forecast annual BESS deployments by region and application scenario

  The report explicitly incorporates the U.S. data center BTM storage opportunity into its demand forecast and raises forecasts for EMEA and Australia to reflect current market demand and policy support.

• Valuation methodEV/S and EV/EBITDA sum-of-the-parts valuation

  Value NRGV's core battery integration business and Asset Vault separately

  NRGV's core business is valued at 0.8x 2027E revenue EV/S, while Asset Vault is valued at 6.0x 2028E EBITDA EV/EBITDA; net debt per share is then deducted to derive the $2.50 target price.

• Thematic mappingSupply chain exposure analysis

  Map data center BTM storage demand to beneficiary companies

  The report lists companies such as CATL, CSIQ, FLNC, F, LGES, NXT, Samsung SDI, SHLS, Sungrow, and TSLA, explaining their exposure across batteries, energy storage systems, EBOS, UPS, software integration, and data center power solutions.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• FLNC

  Direct beneficiary of data center BTM storage

  Strengths

  Has the exclusive battery partnership in Nvidia's DSX Vera Rubin reference architecture, MSA opportunities with two hyperscalers, a 12GWh data center pipeline, and the Smartstack data center solution.

  Weaknesses

  Revenue realization still depends on win rates, shipment timing, and project execution in data centers.

  Comparison

  Compared with typical storage suppliers, FLNC has more direct data center exposure and is viewed by Goldman Sachs as an important beneficiary under a Buy rating.

  Risks

  Pipeline conversion fails, pricing comes in below assumptions, project delays, and intensifying competition.

• NRGV

  Asset Vault and battery integration business may benefit from data center demand

  Strengths

  Asset Vault serves hyperscalers and data center companies, targeting about 350MW of powered shell projects under construction and about 1.8GW of powered land projects under construction and in development by 2030.

  Weaknesses

  The report is still waiting for Asset Vault to expand its operating portfolio and gain more commercial traction; trends in software and services lead to reduced near-term margin forecasts.

  Comparison

  Goldman Sachs includes Asset Vault as incremental valuation in the target price, but the overall stock rating remains Sell.

  Risks

  Demand falls short of expectations, changes in customer concentration, pace of cost declines, and Asset Vault execution and financing risks.

• CATL

  Core global supplier of energy storage batteries

  Strengths

  Roughly 30% global energy storage market share at the battery level in 2025, with high-capacity solutions such as TENER 6.25MWh, and lists data centers as an emerging core application.

  Weaknesses

  The report does not provide a valuation update in this piece.

  Comparison

  Holds a globally leading position in both cell and system capabilities.

  Risks

  Lithium prices, competition, substitution by alternative technologies, and overseas policy risks.

• CSIQ

  Participates in data center storage through e-STORAGE

  Strengths

  e-STORAGE provides integrated BESS solutions such as SolBank 3.0, with a global project development pipeline including 81GWh of storage capacity.

  Weaknesses

  Goldman Sachs rates the stock Sell, indicating continuing pressure on fundamentals or valuation.

  Comparison

  Storage revenue is expected to rise from 3% of revenue in 2023 to about 34% in 2026, increasing the importance of the storage business.

  Risks

  Project margins, order conversion, competition, and financing conditions.

• TSLA

  Megapack and Megablock benefit from AI load growth and grid stability needs

  Strengths

  Energy storage deployments reached 46.7GWh in 2025, are expected to exceed that level in 2026, and the company is expanding its Megafactory near Houston.

  Weaknesses

  Goldman Sachs rates the stock Neutral; although the energy business is growing, valuation is still influenced together with the core auto business.

  Comparison

  Has advantages in scaled commercial storage manufacturing and brand strength.

  Risks

  Energy storage capacity ramp, margin volatility, project delivery, and competition.

Key data

• U.S. 2030E BESS deployment forecast172GWhRaised from the previous 112GWh, newly incorporating about 60GWh of BTM storage deployments.
• Incremental U.S. 2030E BTM opportunityabout 50GWh plus 11GWh 800V DC data center marketThis compares with about 161GWh of U.S. utility-scale BESS opportunity, for total U.S. BESS deployment of about 172GWh.
• U.S. power demand CAGR3.2%Goldman Sachs' utilities team raised this from 2.6% to 3.2%, mainly driven by higher data center power demand.
• Data center BTM power demandabout 3GW per year, 2027-2030Equivalent to about 0.5 percentage points of total power demand CAGR through 2030.
• EMEA 2030E storage deployment142GWhRaised from 83GWh, with growth mainly coming from Germany, Spain/Portugal, and other parts of EMEA.
• Global 2040E storage installationsabout 2,104GWhThe table shows global annual battery storage demand of about 2,104,459MWh in 2040E.
• FLNC data center pipeline12GWhThe F2Q26 data center pipeline grew 30% quarter over quarter; if it secures 15%-25%, this could contribute a 1.8-3.0GWh opportunity.
• FLNC potential revenue opportunity$360mn-$600mnEstimated at about $200/kWh, equivalent to roughly 8%-14% upside to Goldman Sachs' F2028 revenue forecast.
• NRGV target price$2.50Raised from $2.00; the report lists the July 16, 2026 closing price at $3.04, and the rating remains Sell.
• NRGV 2026E-2028E revenue forecast$243mn / $303mn / $364mnCorresponding changes are (3%)/(1%)/5%.

Impact & implications

In terms of investment implications, AI data center power demand expands BESS from a traditional renewable energy support tool into part of data center infrastructure. Beneficiary areas include battery cells, storage integration, UPS/BBU, electrical interconnection, power conversion, software control, and onsite energy asset platforms. FLNC is viewed as a more direct beneficiary because of its data center pipeline and hyperscaler MSA opportunities; although Asset Vault valuation is now included in NRGV's target price, the rating remains constrained by insufficient commercial validation amid weaker core software and services trends.

Risks

• Data center BTM storage demand materializes below forecast.
• Grid interconnection bottlenecks ease, or gas and other onsite power solutions displace BESS.
• Energy storage system pricing, margins, and project financing conditions are weaker than assumed.
• Pipelines at companies such as FLNC and NRGV fail to convert into orders and revenue as expected.
• NRGV's Asset Vault business is still at an early stage, and there is uncertainty around operating portfolio expansion and customer traction.
• Alternative technologies such as long-duration storage, sodium-ion, and hydrogen fuel cells could reshape the competitive landscape.

What to watch

• BTM storage procurement, MSA signings, and actual shipment pace from hyperscalers and AI data center operators.
• Whether U.S. data center power demand CAGR and BTM power demand approach Goldman Sachs' assumptions of 3.2% and 0.5 percentage points.
• FLNC's win rate, pricing, and F2027/F2028 shipment confirmation for its 12GWh data center pipeline.
• Whether NRGV Asset Vault powered shell and powered land projects reach management's 2030 targets.
• Whether upward revisions to EMEA and Australia storage demand are validated by policy, tender, and grid interconnection data.
• Energy storage cell costs, system pricing, margins, and the commercialization progress of long-duration storage technologies.