Executive Summary

• Thermal energy storage is chemical energy storage’s cooler older brother… and is becoming a major player in the cooling and energy storage game due to its multiple strategic advantages.
• By shifting 30% or more of a facility’s electricity consumption to off-peak periods, TES slashes operational costs and carbon emissions using thermal batteries, chilled water tanks, or ice storage.
• As electricity grid constraints tighten up even more, thermal energy storage is becoming a more attractive strategy to employ as we make the transition to clean energy.

There are many headlines around chemical batteries, but this article explores a different, colder avenue: thermal energy storage. Just think if an office block decided to, instead of using power-hungry air con, freeze a gigantic block of ice in the basement at 3 am, so the next day, air was blown across the ice cube to stay cool.

Cooling accounts for 40% of a data centre’s total power draw; it’s a huge part of keeping data centres operational, especially as we reach high-density AI workloads and AI chips, which generate an unbelievable amount of heat. But when the local power grid maxes out on a hot summer afternoon, that’s when data centres are told to turn their air conditioning down, but that increases the risk of total server failure.

What is thermal storage?

Thermal energy storage helps operators shift around 30% or more of a facility’s electricity consumption to off-peak periods, so it lowers operational costs, reduces carbon emissions by utilising thermal batteries, chilled water tanks or ice storage to manage cooling loads.

There are two sides to it.

The cold side (cooling storage)

• Ice and chilled water tanks, where facilities charge TES tanks during off-peak hours by cooling water or generating ice. The stored cold energy cools data centres during the day, preventing sudden temperature spikes and helping to reduce the HVAC load.
• Reservoir and aquifer storage uses subsurface groundwater or aquifers as natural thermal batteries. So, during nighttime or colder seasons, water gets chilled and stored underground. When it’s warmer, it gets pumped to the surface and run through a heat exchanger, providing direct cooling.

The hot side (waste heat recovery)

• Advanced systems capture server heat and use heat pumps to raise the temperatures to integrate it into district heating networks that warm local buildings and homes.
• Phase change materials absorb and release heat at constant temperatures, so data centres can instantly release stored heat to meet sudden local demands.

Huge strategic benefits

Shifting 30% or more of electricity consumption away from those peak times brings a strong strategic advantage.

As you can imagine, there’s a large financial payoff because the electricity needed for cooling during peak hours is dramatically reduced and data centres free up the all-important grid capacity, which allows them to pack in up to 11% more revenue-generating AI chips on the same power connection.

Thermal energy storage is becoming a key player in the energy transition because it stands out for its cost-effectiveness in storing heat and cold in comparison to electricity. There are four main factors that are contributing to the global TES market: decarbonising the power and heat sector, grid flexibility, enhancing energy security by replacing fossil fuels and increasing project scale from 2025-2026.

The operational expenditure is reduced a lot, since the system is taking advantage of off-peak energy rates and avoiding chargers for peak-time. Furthermore, it accelerates net-zero goals by using thermal batteries; it lowers direct energy consumption and enables sustainable project growth.

As electricity grid constraints tighten up even more, thermal energy storage provides a cooling solution that is cost-effective, high-return mechanism to lower operating expenses, safeguard high-density IT infrastrucutre and unlock revenue expansion without utility grid upgrades.