Data center company Crusoe requires a large amount of electricity to keep its servers running smoothly. To avoid power shortages, the developer is actively securing its own energy storage systems. Crusoe just announced two major agreements to purchase large-scale battery systems from Form Energy and Redwood Materials. These deals show how eager data center builders are to lock down reliable electricity. As technology companies build larger facilities, they realize they cannot rely solely on the traditional power grid. They must build massive backup systems to keep their operations online at all times.
Under the first deal, Crusoe agreed to buy 12 gigawatt-hours of battery storage from Form Energy. Form designs special long-lasting batteries that can discharge electricity steadily for up to 100 hours. This marks the second massive sale for the battery maker in just the last few weeks. Last month, tech giant Google agreed to buy a 30-gigawatt-hour battery system from Form for a facility in Minnesota. Industry experts estimate that the Google deal cost around $1 billion. While neither company shared the exact price tag for this new Crusoe purchase, it clearly represents a massive financial commitment. Form plans to start delivering these new batteries to Crusoe in 2027.
This new contract will deliver hundreds of millions of dollars in fresh revenue directly to Form Energy. The timing works out perfectly for the young company. Form currently wants to raise another $500 million from outside investors in a new funding round. Before this recent streak of massive tech contracts, the startup mostly signed much smaller deals. Usually, local utility companies simply bought small units to test out the new technology. Now, wealthy tech companies are throwing massive amounts of money at the startup. To date, investors have poured roughly $1.4 billion into the battery maker.
Form Energy builds batteries quite differently from the ones you find in your smartphone or electric car. The company creates unique iron-air batteries. When the system needs to supply electricity, it allows oxygen from the outside air to flow over tiny iron particles inside the battery case. This creates a simple chemical reaction. The oxidation process essentially rusts the iron and generates electricity at the same time. When the operator wants to recharge the battery, they send electricity back into the system. This incoming power reverses the rust process and releases the oxygen back out into the air. This method provides a very cheap way to store energy for a very long time.
Form expected this massive wave of demand. Last year, the company began expanding its primary manufacturing facility in West Virginia. The factory leaders wanted to prepare the facility for exactly this kind of giant commercial contract. Now that data center operators are actually signing the paperwork, the West Virginia plant will stay incredibly busy. Data centers consume so much power that regular lithium-ion batteries cost way too much for long-term backup storage. Form provides a cheaper alternative that can keep a facility running for days instead of just a few hours.
Crusoe did not stop at the Form Energy deal. The developer also announced a major project expansion with Redwood Materials. Former Tesla chief technology officer J.B. Straubel founded Redwood to recycle and reuse old batteries. Electric car batteries eventually lose some of their punch and become unfit for daily driving. However, these older batteries still hold plenty of charge for stationary projects. Redwood takes these used car batteries, bundles them together, and gives them a second life.
Crusoe and Redwood already have a strong working relationship. Since June, the data center company has operated a giant battery setup on a local power microgrid. This existing system provides 12 megawatts of power and holds 63 megawatt-hours of energy. When the companies flipped the switch on the project, it became the world’s largest second-life battery installation. Now, the two companies plan to push the boundaries even further.
Soon, Redwood will deliver extra equipment to provide an additional 8 megawatts of power to the Crusoe site. The company will build the entire expansion using repurposed electric-vehicle batteries. By combining the long-lasting iron batteries from Form Energy with the recycled car batteries from Redwood, Crusoe creates a highly reliable power setup. Data centers need massive amounts of electricity to support the booming artificial intelligence industry. Tech companies know they must build their own energy reserves to succeed in the future.
