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September 3, 2019 | Rob Hirschberg

Is Lithium-Ion Battery Technology Taking the Data Center Industry by Storm?

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The data center industry is set for a monumental change, as uninterruptible power source (UPS) technology improves. With the required infrastructure in place, more data centers are warming to the idea of using lithium-ion batteries, an idea that even just a few years ago would not have been feasible.

In fact, even recently the idea of using a lithium battery to power anything other than a remote-controlled vehicle would be hailed by many as a monumental mistake. Crises such as those with the Galaxy Note taught us that the manufacturing of lithium-ion batteries varies widely across the industry, which can make them less reliable and stable based on where it comes from. When safety is a real and present issue, it does not seem to justify the higher price tag. Because so many customers rely on data centers to deliver their services at their promised level of uptime and functionality, data center owners would only consider the most reliable sources of power, which, until very recently, only included valve-regulated lead-acid (VRLA) batteries.

However, several factors drive the trend in lithium-ion battery adoption as a viable source of power in data centers.

Jon Centella, Director of Sales - Critical Power, Alpine Power Systems

“Lead-acid batteries paired with uninterruptible power systems (UPS) have been the go-to source for providing brief ride-through time for data center professionals for decades. Competitive technologies have tried for years to highlight potential drawbacks for VRLA batteries.  At some point a competitive technology, more specifically, lithium-ion batteries will become an alternative to lead-acid batteries in the data center environment. There are positives for both technologies depending on the form, fit, and function of each customer.”

Christopher Wade, Area Manager, Data Center Engineering Operations Management, Amazon Web Services

“The VRLA battery has been around since the 80’s and batteries have come a long way since then. There has been a recent shift in data centers from relying on VRLA batteries to lithium-ion (Li-ion) batteries. While typical data centers will most often use VRLA batteries, many major corporations have already transitioned to the more modern Li-ion batteries.

Data centers are now focused on energy efficiency more than ever before. The dominant metric used to measure data center efficiency is Power Usage Effectiveness (PUE). Lead-acid batteries struggle to compare with Li-ion technology, due to their enormous size, poor efficiency and need to be replaced much more frequently. The lead-acid battery has a best estimate of around 85% efficiency, but modern, state of the art batteries have hit an efficiency level of 99%. Since Li-ion has a higher power density, greater energy density and are more lightweight than VRLA batteries, data center operators can now switch to the smaller, lighter and more efficient batteries.”

Nancy Novak, SVP of Construction, Compass Data Centers

“This change is being driven by a variety of reasons that can all effectively be included under the heading “Total Cost of Ownership”. Although the initial cost for lithium-ion batteries is more than their VRLA counterparts, when you factor in the fact that their lifespan is 2-3 times longer, and can operate with higher cooling temperatures, they return their initial investment in only 5-7 years.”

A recent prediction stated that lithium ion batteries will power up to 35% of the market by 2025, compared to just 1% in 2016.  Li-Ion technology stands to benefit data centers, especially when increased competition and globalization of the economy demand higher efficiency and lower operating costs while delivering high quality performance and service. The newest generations of li-ion batteries are becoming more reliable and stable.

Batteries Driving the Data Center

Batteries play an integral role in the delivery of a data’s center’s UPS. When a main power source failure occurs, battery technology can work with other components to minimize downtime and keep security systems and electronic systems running as expected. Battery failures pose a huge risk to data centers, as a power interruption can leave businesses vulnerable and cost millions of dollars, to both customers and the data center itself.

Battery systems themselves are complex and have many connected parts that must work together to deliver optimal performance. Cells and cables erode and affect the performance of the battery over time, and data centers must follow certain protocols, including monitoring battery health, safe handling and storage, and replacing before failure occurs.

Monitoring and maintenance is expensive and should be factored into the overall investment of battery technology. Though VRLA batteries have previously been the best and one of the only batteries powering the data center industry, innovations in li-ion technology present a viable alternative for certain applications.

What Are the Benefits of Lithium-Ion Batteries for the Data Center?

Manufacturers of lithium-ion battery technology are already hard at work making batteries specifically to power the data center. The potential benefits to leveraging the technology are significant.

  • Lower operating costs. Lithium-ion batteries are a larger upfront investment compared to VRLA, but the total operating cost is much lower, which can save organizations up to 50%.

  • Fewer replacements. Lithium-ion batteries last up to 15 years with proper care, storage, and monitoring, compared to seven years for its VRLA counterpart.

  • Less risk of downtime or power failure. Since lithium-ion batteries require fewer replacements and refreshes, they are more reliable and pose less risk of a power system failure.

  • Smaller size. On a practical level, li-ion batteries weigh significantly less and take up less space than a VRLA battery, making more floor space for IT.

  • Less charging time. VRLA batteries can take around 12 hours to recharge; a li-ion battery can recharge in two hours.

  • Cost savings from cooling. Lithium batteries can operate at higher temperatures without degrading or sacrificing safety compared to VRLA. This allows data centers to significantly reduce their cooling costs.

Christopher McLean, PE - Mission Critical Solutions, Director

Twitter: @mcdean

Facebook: @mcdeaninc


“Architects and engineers are keen on the innovation and efficiency made possibly by this technology. When used with an uninterruptible power supply (UPS), a lithium-ion battery solution can provide run-time comparable to that of VRLAs, but with a smaller footprint, less weight, less required maintenance, longer operating life, and potentially reduced supporting HVAC systems. While first costs are higher, the comprehensive cost of ownership is lower, as can be the size of the electrical room, and thus facility as a whole. With reduced structural cost, higher install productivity, and reduced lifecycle replacement, lithium-ion batteries represent improvement in critical power applications.”

Scott Offerman, Managing Director, Cushman & Wakefield

“[The] upside is size and weight.  In applications that have these limitations, Li-ion is a viable option.  As the industry evolves it is hopeful that the cost will decrease, life increase and the systems will become more resilient.”

VRLA and Li-Ion by the Numbers

Lithium-ion batteries sound good on paper; what does the comparison to VRLA look like dollar to dollar? Vertiv conducted a cost comparison analysis that considered factors like upfront cost, maintenance and service, replacement, and disposal. Battery evaluation was based on a 1 MW load and a 9-minute run time. In general, it found:

  • VRLA battery lifecycles did not vary much by manufacturer, speaking to the maturity of the technology.

  • Li-ion batteries do offer a more significant return on investment, that begins just before the second VRLA replacement cycle.

At the same time, not all news regarding lithium-ion technology is positive. There are a few disadvantages you should also consider.

Offerman: “The largest disadvantage is the maintenance, recovery and failure modes.  No one is truly discussing and identifying the maintenance cycles.  Batteries need to be drained and equalized every 2 – 3 years to achieve the life.  They are not discussing the failure modes.  Lose one battery and the entire string is lost.  In a single-battery failure situation, the entire string is taken off line.  Thermal issues with the batteries require consideration and planning.  After discharge and recharge, the battery should be allowed to cool before being used again.  In a full discharge situation, this could be 24 hours or more depending on the size.”

Wade: “Lithium-ion batteries cost significantly more than VRLA batteries, so the upfront investment may seem to be too high for some data centers. While the initial cost may be higher, the total cost of operation ends up much less over time, saving organizations 30-50%. Another reason the TCO is lower is that lithium-ion batteries last significantly longer than VRLA batteries. VRLA batteries have a service life between 3-6 years whereas li-ion batteries can have an estimated service life of up to 10 years. “

Novak: “Actually, I disagree with the inclusion of total cost of ownership as a downside. Their longer life cycle, reduced maintenance costs and ability to operate at higher temperature thresholds make them a much more cost-effective alternative to VRLA. Too many end users and providers are still stuck in a “pennywise, pound foolish” mindset and can’t get past the difference in initial costs. Data centers are built to operate for a minimum of 15 to 20 years. The failure to view component decisions from that perspective typically results in substantially higher costs over the lifetime of the facility. The decision to use, or not use, LI technology is indicative of this dichotomy in current data center design and construction mindsets. I think the lower cost of ownership coupled with “softer” benefits like the availability of more data floor capacity due to LI’s lower size requirements totally off-set any perceived negatives in making the LI v. VRLA decision.”

McLean: “There is a higher cost up front, but this disadvantage is mitigated by a longer lifecycle, physically smaller footprint (more energy and power density), and reduced need for heat rejection. The battery lifecycle of the lithium product is 17,000 cycles to 80 percent beginning of life, which is few orders of magnitude more than the VRLA solution, which typically has 200-500 cycles depending on the manufacturer. VRLA is also more cost-efficient (VRLA=X, LTO=2.3X). In terms of total cost of ownership, however, lithium is the clear winner. Lithium-ion batteries carry up to a 12-year warranty depending on the manufacturer, and generally include battery monitoring system maintenance, making the warranty best-in-class.”

Centella: “A topic of discussion that needs to be examined is the inherent cost of recycling lithium-ion batteries versus their value at end of life. As part of the TCO discussions, end of life disposal costs must be examined. Lithium-ion batteries are expected to have an associated cost to recycle. Whereas lead-acid batteries have a monetary value at end of life. Lithium ion batteries may be a concern for data center owners because they are responsible for the cost of recycling these batteries at their end of life. Many data center managers are still opting for VRLA batteries within their facilities because of their value at end of life and the lead-acid industry’s 99.8% closed loop recycling process.”

The True Costs Of Downtime

The goal of any battery system in the data center is to reduce the chance of downtime. Consider, for example, that an ecommerce site continually uses its systems to track sales and update inventory. System downtime, for the individual customer, can lead to lost sales, inaccurate bookkeeping, and more.

Then there are considerations at the macro level. A power outage at British Airways in 2017 has become an infamous data center disaster. It resulted in the cancellation of 726 flights, hundreds of lost luggage items, and total losses in excess of $108 billion (not to mention a loss in future business from tarnished reputation).

The estimated cost of data system downtime is around $9,000 a minute. This just factors in the immediate losses. In the long term, these could be much higher. That is why it is essential for data centers to carefully consider their options and what is least likely to lead to downtime. With improvements in technology, lithium-ion batteries are a potential choice to power the UPS system, since they are at lower risk of failure, require less monitoring, and require fewer replacements.

Are Lithium-Ion Batteries Safe?

Of course, with any new change in technology, there will be late adopters. For lithium-ion technology, skepticism is not unfounded, especially given its rocky history. Making the transition from VRLA to lithium-ion batteries will bring safety considerations. For example, high density batteries like lithium-ion require balance during manufacturing. Appropriate balancing, both of chemicals and within the structure itself, help minimize the risk of failure and improves the stability of the technology.

Offerman: “The adoption of lithium technology adoption in the Data Center industry is slow due to the level of education and experience of the operators.  When questions are posed and the industry is not providing adequate answers, the operators are not going to place their operation at risk.  In addition, the miscellaneous incidents with LION batteries catching fire causes concerns.”

Are Lithium-Ion Batteries The Future Of The Data Center?

Today’s data systems are complex, and the needs of customers will only continue to evolve. Increasing demand and more complex operations will drive data center personnel to examine multiple battery technologies. Though data centers may change, one of their most basic needs – battery power – will not. To protect systems from costly downtime, data centers must reconsider how they deliver UPS and support battery technology through its lifecycle.

For the first time ever, the data center industry is looking at alternatives to VRLA batteries. With several documented benefits, such as longer life, better monitoring, and less cumbersome design, lithium-ion batteries are becoming a potential alternative to VRLA. Though they are estimated to command more of the market share in just a few years, those who are considering the switch now will be early adopters to the trend.

Novak: “I think this slow rate of adoption is a function of the traditional ‘we’ve always done it this way mindset’. Until fairly recently data center design and construction efforts differed very little between providers and end users were generally comfortable with that, and associated elements like pricing. The need for rapid data center delivery has been instrumental in changing that mindset. Delivering a complete facility in six month or less is now a de facto benchmark in the industry and this has caused companies to re-examine every element related to how they design and build facilities. This shift in perspectives is also being embraced by the end-user community. I recently saw an estimate that said LI would make up 35% of the market share for UPS batteries by 2025; I think that is very conservative.”

McLean: “Considering the real total cost of ownership over multiple VRLA replacements, reduced heat-rejecting equipment, reduced off gassing, and related electrical cost and maintenance over a similar period would be interesting. I think many facility operators rely too much on the initial cost, and don’t forecast system operating cost, efficiency, degradation, and the like over the expected life of the facility, or at least over a period of time against which all systems can be leveled.”

Wade: “Most experts are predicting that lithium-ion batteries are the way of the future in data centers.  But it will take time and significant investment for legacy data centers to convert from VRLA to lithium ion. VRLA batteries are not going away; they will still be heavily used in data centers, but the future of lithium-ion is looking bright. With new data center construction, many data centers are looking for the cleanest, most efficient energy sources that have the smallest footprint and have the lowest total cost of ownership, and that looks to be the lithium-ion battery.”

Centella: “Lithium-ion batteries are gaining traction within the data center industry and will definitely hold a sizable share of the market in the coming years. Nonetheless, I do believe that their VRLA counterparts will still hold an important role in the market in the future. Lithium-ion is now competing with new VRLA advancements including thin-plate pure-lead and high heat battery technologies. Both, lithium-ion batteries and advanced VRLA technologies will peacefully coexist.”

Lithium-ion batteries will undoubtedly gain market share of the data center market within the coming years. Data center owners should start becoming educated on lithium-ion battery technology as an alternative to VRLA. The industry should also be on the lookout for advancements in VRLA batteries including new thin plate pure lead (TPPL) and high heat technologies.  The need for more reliable power is pushing for innovation in the data center world.

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