Still expecting four-hour batteries to babysit 24/7 AI workloads? That is the grid equivalent of asking a sprinter to run an ultra marathon. The AI boom is rewriting utility playbooks, and Amazon’s new Indiana package shows exactly why batteries help - and why gas is back on the table.

The problem

AI-driven data centers are surging into markets faster than transmission can catch up. Utilities are staring at round-the-clock loads that do not flex, while interconnection queues swell and local constraints bite. The result: reliability headaches, higher peak demand, and a scramble for firm, dispatchable capacity alongside battery energy storage (BESS). The International Energy Agency flags data centers as a rising source of grid stress across the US and Europe, with rapid growth driven by AI and cloud demand, as noted in this analysis.

The Indiana signal: 3 GW dispatchable plus 1.6 GWh BESS

Amazon’s Indiana deal with NIPSCO is a blueprint for serving hyperscale loads. The utility’s GenCo subsidiary plans two 1.3 GW gas plants and a 400 MW - 1.6 GWh battery at the former Mitchell coal site, funded by Amazon and structured to shield existing ratepayers, according to Utility Dive and Energy-Storage News. Amazon calls it a first-of-its-kind setup to underpin a $15 billion data center buildout, as detailed in Amazon’s announcement.

What batteries do well - and where they do not

Four-hour BESS is a scalpel, not a sledgehammer. It excels at fast response, peak shaving, frequency regulation, and covering short renewable lulls. For 24/7 AI power consumption, batteries firm the edges, but sustained baseload still leans on dispatchable capacity. McKinsey frames the trade-offs clearly - BESS is pivotal for short-duration reliability and price arbitrage, while gas or other thermal remains the workhorse for long-duration, as outlined in this brief.

Grid stability and the interconnection squeeze

Indiana is in MISO, but the signal resonates across PJM and beyond: big, inflexible loads need firm capacity plus storage. PJM is trying to unclog its interconnection backlog with cluster studies and readiness requirements, aiming to speed up solar, wind, and BESS projects while filtering out speculative entries, per PJM’s reforms and S&P Global’s analysis. Canary Media notes that hyperscale builds like Amazon’s are reshaping utility planning and forcing new generation and storage to maintain stability, as covered in this piece.

Where the next storage wave is forming

• PJM: Longer-duration batteries are gaining traction to support evening peaks and renewables firming. Queue reforms should help the most shovel-ready storage get built faster, per PJM.
• Australia: AEMO’s planning shows a clear pivot to 4-8 hour batteries for system security and renewable integration. Expect more co-location and bigger durations as AI and industrial loads grow, per AEMO’s Integrated System Plan and the reliability outlook in ESOO.
• Europe: Local constraints are already reshaping siting. Ireland’s grid rules tightened as Dublin hit capacity limits, pushing on-site generation and storage, per Reuters. The UK’s Future Energy Scenarios forecast bigger roles for BESS and demand flexibility to manage regional bottlenecks, per National Grid ESO. The Nordics are aligning data centers with hydropower, wind, and emerging storage policies, noted by Nordic Energy Research.

How to design for 24/7 AI loads

• Pair firm, dispatchable capacity with BESS that can respond in milliseconds - do not expect short-duration storage to carry a 24/7 baseload.
• Target 4-hour systems for price-spread capture and reliability, and evaluate 6-8 hours where renewables and local constraints warrant it, as seen in Australia’s pipeline in AEMO’s ISP.
• Build for interconnection reality - cluster study timelines and readiness rules in PJM and other markets favor mature projects with clear siting and grid models, per PJM.
• Use BESS for grid services and resilience: frequency support, spinning reserve substitution, peak shaving, and fast-ramp coverage around your baseload units, consistent with the roles outlined by McKinsey.

Quick hits: battery life, EV charging, solar performance

• Battery life trends 2025: LFP cycle life keeps improving, with multi-thousand cycle expectations and better calendar life driven by thermal management, per BNEF’s price and lifecycle survey.
• EV charging improvements: Faster DC networks and early V2G pilots hint at more flexible grid support from vehicles, per the IEA’s Global EV Outlook 2025.
• Solar performance updates: Lower degradation rates and bifacial gains are nudging real-world yields upward, per NREL’s reliability reports.

The takeaway

AI is accelerating the need for both batteries and firm power. In Indiana, Amazon’s 1.6 GWh BESS will sharpen reliability and economics - but the 3 GW of dispatchable capacity is what makes 24/7 possible. Expect more hybrid stacks: gas or other firm resources for the spine, BESS for speed and stability, and quicker interconnection paths for projects that actually move dirt. The grid is not choosing between batteries and dispatchable capacity - it needs both, and fast.