EQT Is Backing $2 Billion Small-Battery Push to Enable AI

EQT Infrastructure is backing a $2 billion small-battery investment to slash power costs for industrial consumers and help data centers get connected faster to the largest US electricity grid.

Madison Energy Infrastructure, the distributed-power developer owned by EQT Infrastructure, will add 1 gigawatt in power capacity by 2028, starting with PJM Interconnection LLC’s 13-state grid, Madison Chief Executive Officer Richard Walsh said in an interview. He said the plan is to install batteries that can discharge for four hours of power at a time at industrial and commercial sites, including waste water treatment facilities.

Technology giants and other data center developers are looking to lock in long-term supply contracts from nearby batteries and solar installations as a way to power up more quickly rather than waiting for a traditional grid connection. Walsh said these installations will help cut utility bills for industrial customers that are struggling with soaring power costs.

The initiative was launched in recent months in response to struggles in PJM’s territory to manage swelling power consumption to feed the artificial intelligence boom when aging equipment networks and more extreme weather are straining the system, Walsh said.

PJM plans to hold an auction to procure power supplies for data center demand. Meanwhile, some facilities are seeking to bring their own generating capacity to the table to speed startup. As large technology companies and others race to build large natural gas-fired plants to support AI, Madison Energy is vying to build a network of small distributed resources that can be sprinkled through communities, and these batteries can shore up more vulnerable points of the grid.

“The hyperscaler is happy to pay for it; they just don’t have the tentacles to know where to put things,” Walsh said. “There’s a real shortage of power in the country.”

The PJM region already is home to the highest concentration of US data centers, in northern Virginia, which continues to expand and push utility bills higher. The resulting political outrage is adding friction to efforts by AI developers to construct new facilities. The plentiful reserves PJM once had have been eroded and the grid has had to tap emergency supplies more frequently to keep the system stable in extreme weather.

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EQT is the sole equity investor in the initiative while Madison plans to also tap a network of lenders, which typically include mid-sized banks looking to fund community products, Walsh said.