Written by: Rita

Trend Guide

Data centers are experiencing a power crisis. Increasing a GPU from 0% to 100% only takes a few milliseconds, and the power grid simply cannot handle this volatility. On July 16, Goldman Sachs released an energy storage report, concluding straightforwardly: expanding the traditional power grid will take four to eight years, while energy storage can be resolved in twelve to eighteen months, becoming the fastest "jump the queue" solution for data centers.

The growth rate of electricity demand in the United States has just been raised from 2.6% to 3.2% by Goldman Sachs' utility team, with data centers being the biggest variable. Of that, 0.5 percentage points come from the "behind-the-meter" model where data centers generate and store their own power, translating to approximately 3GW of DC power demand annually by 2030.

Goldman Sachs estimates that, in the U.S. market alone, behind-the-meter energy storage will have an additional capacity of about 50GWh by 2030. The global energy storage market is expected to reach an annual installation capacity of 2100GWh by 2040. From CATL to Tesla, from FLNC to Energy Vault, energy storage companies are becoming the invisible arms dealers of AI infrastructure.

The Grid Cannot Keep Up With GPU Speed

The electricity consumption logic of data centers has changed. Previously, it was 5 to 10 megawatts, now it is 100 to 200 megawatts, and large parks can achieve gigawatt levels. Rack density has soared from 5 to 10 kilowatts to over 50 to 100 kilowatts. More critically, GPU loads can spike from 0% to 100% in milliseconds, which is a huge shock to the power grid.

Gas turbines are not suited for this job. Industry feedback indicates that gas turbines can only start and stop twice a day, and frequent switching will accelerate wear. Some cases show that some new combined cycle gas turbines failed within seven months due to frequent load fluctuations.

Energy storage can solve this problem. Its response time is in the millisecond range, and deployment cycles are 12 to 18 months, much faster than grid expansion. Skipping the congested grid connection queues is the greatest competitive advantage of energy storage. Goldman Sachs is defining it as an independent business model, not just the concept of a backup power source.

Where Does the 50GWh Increment Come From?

Goldman Sachs' Asia battery team estimates that by 2030, the behind-the-meter energy storage opportunity in the U.S. will bring about 50GWh of incremental capacity, plus 11GWh from 800V DC data centers, leading to a total energy storage deployment in the U.S. reaching 172GWh. This figure has been significantly raised from the previous 112GWh.

Goldman Sachs' utility team just raised the growth rate of electricity demand in the U.S. from 2.6% to 3.2%, with 0.5 percentage points coming from the behind-the-meter model, equivalent to about 3GW of DC power demand annually by 2030. This is a structural change, not a marginal one.

Globally, Goldman Sachs expects the annual installation capacity of energy storage to reach about 2100GWh by 2040. The energy storage demand of data centers is becoming an important variable on this growth curve. Forecasts for the EMEA region have been raised from 83GWh to 142GWh, with Germany, Spain, and Portugal being the major driving forces. Residential energy storage in Australia is also growing exponentially.

Energy Storage Companies Are Turning Into Arms Dealers for AI Infrastructure

Goldman Sachs has thoroughly analyzed noteworthy companies in the energy storage supply chain in the report:

FLNC (Buy, target price $22) has secured exclusive battery partnership qualification for NVIDIA's DSX Vera Rubin reference architecture. It has signed main supply agreements with two hyperscale clients and is bidding for a 12GWh order. As of Q2 2026, the data center pipeline projects reached 12GW, a 30% quarter-over-quarter increase. Goldman Sachs estimates that this business will contribute about 8% to 14% of revenue by 2028.

CATL (Buy) holds about 30% market share in the global energy storage battery market and has clearly listed data centers as a core application scenario. The TENER 6.25MWh system has been used at the Shanghai SenseTime AI data center, reportedly reducing electricity costs by 7%. Sodium-ion storage is expected to start deliveries by the end of 2026.

Tesla (Neutral) is expected to set a record in energy storage deployment at 46.7GWh by 2025, with higher expectations for 2026. Megapack and Megablock are becoming key infrastructures for grid stability at hyperscale data centers. Goldman Sachs expects Tesla's energy business to reach revenues of $29 billion in 2028, accounting for about 21% of the company's total revenue.

Energy Vault (Neutral, target price $2.5) is transforming from an energy storage system supplier to an energy infrastructure platform. For the first time, Goldman Sachs included the Asset Vault business in the valuation, granting a six times EV/EBITDA valuation. It is expected that the EBITDA profit margin of this business will be around 64% by 2028.

LGES (Buy) is converting five production bases in North America to ESS dedicated production lines, with North American capacity expected to reach 50GWh by the end of 2026. The proportion of energy storage revenue is expected to rise from about 14% in 2025 to about 31% in 2026. The company is offering a "one-stop" solution for batteries combined with software through its subsidiary Vertex, also bundling the group’s self-owned liquid cooling and data center design services.

Other notable companies: Canadian Solar (Sell, subsidiary e-STORAGE has 81GWh project reserves), Ford (Neutral, Ford Energy is expected to contribute $3 billion in revenue by 2028), Samsung SDI (Neutral, ESS battery revenue proportion rises to about 26%), Shoals (Buy, BESS product revenue estimated at $30 million to $35 million in 2026), Sungrow (Neutral, energy storage contributes about 42% of revenue).

Trend Perspective

The most important contribution of Goldman Sachs' report is turning "data center energy storage" from a concept into a quantifiable market. The 50GWh increment in behind-the-meter storage signifies that energy storage is transitioning from "supporting equipment for renewable energy" to an "essential need for AI infrastructure."

This identity shift will change the valuation logic of the entire industry. Energy storage companies no longer just follow the pace of photovoltaics and wind power; they directly benefit from the expansion of AI capital expenditures. Goldman Sachs raised the target price of FLNC from $20 to $22, as the visibility of data center orders is increasing.

But this report also needs to be read inversely. The targets mentioned by Goldman Sachs include Buy, Neutral, and Sell ratings, and investors need to distinguish which ones are truly supported by orders and which are just tangentially related. FLNC has an exclusive agreement with NVIDIA, CATL has real shipments, and Tesla is deploying data. The gap between these and those companies "developing related products" is a real one.

Disclaimer

This article is a整理 and interpretation by Trend Research of third-party brokerage research reports (Goldman Sachs, July 16, 2026). The ratings, target prices, earnings forecasts, and related judgments cited in this text are the views of the brokerage's analysts and only represent the position of their respective institutions, not the views of Trend Research, nor do they constitute any investment advice.

The market has risks, and decisions should be independent. This article should not be used as a basis for buying or selling any securities.