Reno, NV – A modular data center nestled among solar panels near Reno is operating almost entirely off the electric grid, using second-life electric vehicle batteries as its primary power source.
This facility, built by startup Crusoe, represents a radical departure from the norm – at a time when data centers are blamed for driving up electricity demand and triggering political backlash over rising bills and environmental harm, it offers a blueprint for sustainable, grid-independent computing.
The setup relies on hundreds of repurposed EV batteries sourced from Redwood Materials, a $6 billion battery recycling company led by former Tesla executive JB Straubel. Straubel told reporters, “I have an aversion to waste. It pained me to see perfectly usable battery packs going to recycling when they still hold significant value for energy storage.”
Background: Why This Matters Now
The U.S. energy storage market is booming. Last year, a record 18.9 gigawatts of battery storage capacity were added – enough to power up to 20 million homes for an instant. In California, batteries recently supplied 43% of total power at one point.
Yet the surge in data center construction, driven by AI and cloud computing, is straining grids nationwide. Utilities warn that new data centers could require costly new gas plants, which the White House now demands be paired with on-site generation.
Redwood’s solution uses the remaining 70-80% capacity in used EV batteries, drastically lowering costs and avoiding supply-chain bottlenecks.
What This Means for the Energy and Tech Sectors
For data center developers, this microgrid approach eliminates long waits for utility interconnection and reduces political opposition. For utilities, it offers a cheaper way to store renewable energy without building new transmission lines.
Straubel’s team is already scaling up: “The insight came just as energy storage was poised to explode. We saw we could be one of the first to repurpose batteries at scale,” he explained. The U.S. Energy Information Administration expects battery storage capacity to surge over 50% by early 2027.
Critically, the Nevada facility doesn’t just avoid grid strain – it also avoids new pollution. While some data center operators are planning gas plants that could emit more than entire countries, Redwood’s batteries make renewables viable around the clock.
“This is a win-win,” said an industry analyst. “It lowers costs for tech companies, eases pressure on the grid, and turns a waste stream into a revenue stream.”
Looking Ahead
Redwood Materials is now in talks with multiple utilities and data center operators to deploy similar systems. The company’s $6 billion valuation reflects investor confidence in a market that could be worth tens of billions.
This story is developing. Check back for updates.