No More BESS'ing Around – US Storage Supply & Demand on the Rise

Research evidence excerpt

No More BESS'ing Around – US Storage Supply & Demand on the Rise

at BESS is well-equipped to address. However, . Runrate Supply US Demand (BNEF) US Demand (JEFe*)

sizing the full opportunity remains a challenge, with developers still determining the optimal Source: JEF Research, BNEF

compute-to-storage ratio. Despite how early the opportunity remains, we estimate ~50GW of data

center BESS volume through 2035, or ~125GWh.

Not Reflected in our Demand Forecast? BESS as a Transmission Asset. Our forecast captures

incremental demand from developers and hyperscalers building gigawatt-scale campuses but

does not explicitly capture the emerging opportunity to reinforce utility transmission lines and

substations. Initial spend signals from DTE and ETR suggest to us utilities are opportunistically

using storage to extend critical grid infrastructure life and therefore manage capital costs. The

opportunity could be material, representing incremental BESS upside beyond current forecasts.

Two Sides of the Same Coin: Let's Talk Supply. US demand is on the rise, and so is supply, with Julien Dumoulin-Smith * | Equity Analyst

domestic LFP cell production targeting ~100GWh of annual capacity. With cell blending still viable +1 (281) 774-2066 | jds@jefferies.com

— whether with Chinese or other foreign cells — 100GWh/year should be more than enough to meet Paul Zimbardo * | Equity Analyst

US demand, even as we raise our forecast. +1 (212) 778-8497 | pzimbardo@jefferies.com

Philippe Houchois ^ | Equity Analyst

Over-Supply Bear Case is Over-Done. The ~100GWh/year of anticipated domestic supply has 44 (0) 20 7029 8983 | philippe.houchois@jefferies.com

been cited as a signal of expanding competition and ASP pressure, likely squeezing US system Ivana Ergovic * | Equity Analyst