As the market for electric vehicle batteries stalls and demand for AI data center infrastructure surges, Panasonic is pivoting its battery division to meet the moment, according to multiple news reports.

The Japanese electronics manufacturer is making an approximately $2 billion investment to convert part of an electric vehicle battery plant in Kansas to data center applications, ramp up battery module production in Mexico from one plant to three, and switch a facility in Osaka, Japan, from vehicle production to lithium-ion batteries and supercapacitors.

For decades, data centers primarily used batteries in emergency backup systems that bridge the gap between a grid outage and the time it takes to fire up backup generators. Today, batteries also address challenges in AI data centers related to voltage stability, power quality and peak demand management, notes Manufacturing Today.

Investors also poured $54 million into Verse, a startup that uses batteries to provide greater grid flexibility that helps data centers secure faster connections to the power grid, which exceed five years in some markets. Meanwhile, a member-owned electric cooperative in Minnesota is turning to batteries to offset rising wholesale electricity costs related to data center demand.

News Bytes

Grid Connections: The Federal Energy Regulatory Commission recently told six regional grid operators to ensure data centers and other large power users can connect to the transmission system in a timely and orderly manner. Data centers will be responsible for paying the costs of interconnection. Tech companies and data center developers welcomed the news.

Electricity Prices:Data centers and other large loads “have not been a principal driver of price increases, and in some locations have led to deflationary pricing,” according to a new report from the Center on Global Energy Policy at Columbia University. A separate analysis from the Electric Power Research Institute suggests that data centers have so far put downward pressure on retail costs. The caveat, notes the Axios Future of Energy newsletter, is that“many massive data centers are on the drawing boards, and the AI industry’s power suck is slated to grow a lot.”

APAC Action: The data center boom is booming across Asia-Pacific with more than 32 gigawatts of planned data center capacity across 1,100 projects. These projects are reshaping how power grids accommodate large electricity users with new requirements for reliability, flexibility and clean energy, according to a new report from Wood Mackenzie. Data center market intelligence firm DC Byte digs into potential growth in Kyushu, Japan, as demand shifts away from Tokyo. There, planned capacity has skyrocketed from 101 MW in 2023 to 3 GW today.

One Cool Thing

Carbon Removal: AI company Anthropic has joined Frontier, a consortium of big tech companies that invests in carbon removal technologies. The maker of Claude joins the consortium as an additional $915 million in funding was announced, bringing the total commitment to $1.8 billion.

Carbon removal technologies address emissions that are difficult to eliminate through operational changes alone. The United Nations Intergovernmental Panel on Climate Change has identified carbon removal as necessary to achieve global net-zero targets.

Carbon removal technologies address emissions that are difficult to eliminate through operational changes alone. The United Nations Intergovernmental Panel on Climate Change has identified carbon removal as necessary to achieve global net-zero targets.