SpaceXAI has been operating temporary gas generators without air permits for Colossus 2, on the grounds that they are mobile; 69 units were active there as of July. These generators, which sit on flatbed trailers but run in the same location day after day, produce harmful air pollutants that especially affect nearby areas, including the predominately Black neighborhood of Whitehaven. The Boxtown neighborhood dealt with this issue earlier as XAI got Colossus 1 up and running.
The Southern Environmental Law Center has sued to stop the unpermitted air pollution on behalf of the community, a lawsuit that is still pending.
Batteries, which are being plugged into the U.S. grid at a record-busting pace, don’t combust fossil fuels; they store electricity when it’s plentiful and deliver it when needed. SpaceXAI may be using them as a kind of filter for the electricity flowing into the computers, so that momentary dips and jumps in AI consumption don’t damage the generators or the local grid system.
But it’s unclear whether the massive battery will lead SpaceXAI to reduce its use of mobile generators. If the batteries don’t have access to sufficient grid power, they also could charge up from the generators in an islanded microgrid setup, which would incur further emissions.
AI growth leads to more batteries
The U.S. grid is struggling to keep up with the expected demand growth from AI computing, and data center developers eager to get online ASAP are increasingly looking to large batteries to help speed up interconnection.
The idea is simple: For most of the year, the power system has ample capacity to meet new demand from data center projects. The problems arise on the days when demand spikes, like during a heat wave or a snowstorm.
Big batteries can help during these demand peaks. When electricity use surges, the facility can tap its batteries for a few hours to alleviate the strain on the grid. That’s part of the plan with SpaceXAI’s battery, which was approved for interconnection through a “power interruption” program run by MLGW, McGowan said at the conference early this month.
“They actually have behind-the-meter … generation and storage that can meet all of their load, so that they can actually successfully come off the grid for four hours in order to curtail, so that nobody else has to,” McGowan said.
This was a precondition for hooking up service to the data center, he said. Other states and grid operators have labored to define new “large load tariffs” in order to silo hyperscalers from other grid customers; some states are looking to curtail power to data centers in moments when the grid is under strain. But in TVA territory, local power companies can swiftly implement solutions to the fast-moving AI demand challenge without waiting for yearslong approvals from state or federal regulatory commissions.
“We kind of proved the model here before the ratepayer protection plan was in place,” McGowan said, referring to the White House–led pact to encourage AI companies to fund their own infrastructure upgrades and avoid pushing costs onto the general public.
Other developers have signed contracts for similar projects. Aligned Data Centers will come online in Oregon several years early by paying the utility to build a battery for peak capacity. Google signed up a whole portfolio of solar, wind, and short- and long-duration batteries to run a Minnesota data center.
SpaceXAI’s massive battery could eventually have a beneficial effect on the broader TVA system. TVA has repeatedly stated its desire for more firm, dispatchable power to meet peak demand for the growing population, manufacturing base, and AI industries. TVA identified battery storage as a growth opportunity in its recently completed long-range energy plan, spokesperson Patrick Cassidy noted; the TVA board approved that plan at its August meeting.
“We’re just beginning to tap the potential of battery storage in the Tennessee Valley,” said Gil Hough, executive director of the Tennessee Solar Energy Industries Association. “A project this large shows what’s possible — and it could be a real catalyst for utilities, solar developers, and other energy companies to think much bigger about how storage can help meet the region’s rapidly growing electricity demand.”
TVA operates a large fleet of nuclear and coal plants, which cannot nimbly ramp up and down in response to demand. They keep producing through the night, when most people are sleeping, creating periods of electrical surplus, in contrast to the energy constraints of afternoons and evenings. Batteries could shift energy between those times, as well as store the region’s growing solar generation for use at high-demand hours.
TVA has begun to seek out batteries to inject power when it’s most needed. In April, it signed a contract with pioneering storage developer Plus Power for a 200-MW/800-MWh battery in Jackson County, Alabama. That project followed the regular order of business, in which the utility signs a contract for its services, and then the developer moves forward with construction, which is expected to wrap up in 2029.
Trettel’s remarks to the TVA board suggest SpaceXAI is open to offering up the massive battery installation as a contracted grid resource — meaning the privately constructed batteries could help deliver peak capacity to the broader TVA network, and get paid for it. Should that offer bear fruit, the unbridled rush of AI infrastructure construction would produce a knock-on effect of vastly accelerating the deployment of batteries on the grid.
