Data Center Power Shifts: AI Demand Drives On-Site Renewables, Battery Storage, and National Grid Plans

A data center power startup called TAR has raised $27 million in seed funding to build modular, behind-the-meter renewable energy systems that can be deployed in as little as three months. The company is planning a 10 MW pilot project and expects to deliver its first customer deployment, to an unnamed neocloud offtaker, at roughly twice that capacity.

TAR claims it has a pipeline of more than 200 MW of capacity lined up for 2027 and several additional gigawatts for 2028. The startup's value proposition centers on speed and avoidance of grid interconnection queues, lengthy permitting cycles, and on-site labor bottlenecks. TAR co-founder Pat Becker told Forbes the system will combine solar, batteries, wind, and simple cycle gas turbines for backup, with a target nameplate capacity that far exceeds the 10 MW figure.

Automakers and Sodium-Ion Enter the Picture

General Motors is entering the data center energy storage market. The auto giant has partnered with Peak Energy to build large-scale sodium-ion batteries designed for utilities and data center facilities. Sodium-ion chemistry uses more abundant materials than lithium-ion, which could lower costs and reduce supply chain risk. The move marks a diversification for GM, which is already active in electric vehicle batteries and is now targeting stationary storage for the power-hungry data center sector.

• GM and Peak Energy will develop sodium-ion battery systems for data center backup and grid support.
• Sodium-ion batteries avoid lithium and cobalt supply constraints.
• The partnership signals growing industrial interest in data center power infrastructure.

China's $295 Billion National Data Center Grid

China is planning to spend nearly $295 billion on a national data center grid that would rely heavily on domestically manufactured semiconductors. The infrastructure project is intended to support AI workloads at a national scale and is being backed by government financing and China's three state-owned telecom operators. The plan calls for networked data centers across multiple regions, powered by Chinese-made silicon, in a bid to outperform U.S. AI infrastructure. This centralized approach contrasts with the decentralized, on-site power solutions emerging in the United States.

Grid Constraints and the On-Site Power Trend

The flurry of activity around on-site power generation, battery storage, and national grid planning reflects a single underlying reality: electric grid capacity is not keeping pace with data center growth. A recent analysis published by Data Center Knowledge notes that on-site power solutions, including behind-the-meter renewables and gas turbines, are increasingly used to bypass multi-year interconnection delays. TAR's offering fits into this trend, as does GM's battery play and China's state-driven mega project. The U.S. approach favors private capital and modular deployment; China's favors central planning. Both aim to unlock power for AI infrastructure within a few years, not a decade.

TAR's pilot site remains undisclosed. The company said it expects to use gas turbines for only a few weeks per year, if at all, relying primarily on renewables. Becker acknowledged that TAR's energy pricing is not cheaper than grid power, but said it is far below the $150 to $160 per MWh seen in some behind-the-meter PPAs. The first commercial deployment is expected before the end of 2026.