VIDEO: ‘It’s going to massively scale here’: Fluence chief predicts data centre battery storage slingshot in Australia

“We’re incredibly excited about the work that we’re doing with our hyperscale customers, and we’re starting to get to a place where we’re going to build that blueprint with them in the US. We’re very far along with quite a few customers on what that blueprint looks like. Once we finalise that, we’re going to see that rapidly scale.”

While Australia is experiencing its own surge in data centre development, particularly around Sydney and Melbourne, driven by AI workloads and cloud computing expansion, Monday suggests the local market will benefit from, and potentially leapfrog, the development work currently underway in North America.

“I know you talked about the data centre progression that’s happening here in Australia, but I actually see it’s probably a bit of a slingshot in that once the blueprints are defined, I think it’s going to massively scale here locally,” he says.

That confidence reflects both the global nature of hyperscale infrastructure deployment and the specific technical requirements that battery storage can address in data centre environments, often requirements that are largely consistent across markets, even as regulatory frameworks differ.

See the full video of our interview:

Three use cases reshaping data centre infrastructure

Monday, who spent 20 years at Apple and six at Qualcomm before joining Fluence, outlined three primary applications for battery storage in data centre environments that are driving the company’s work with hyperscale customers.

The first centres on speed-to-power. This includes using battery systems to reduce the firm power commitment required from the grid and accelerate progress through interconnection queues.

“You can apply BESS to basically lower your firm power commitment to the grid, acting as a bit of a peak shaver to accelerate your path through the interconnection queue,” Monday explains.

As data centres face lengthy grid connection timelines in multiple markets, battery systems can allow projects to energise faster. In contrast, the full grid connection is completed, a particularly valuable capability as AI infrastructure deployment timelines compress.

The second use case addresses backup power and what Monday terms “power bridging.”

Traditional uninterruptible power supply (UPS) systems deployed in data centres are inefficient, he notes.

“By putting BESS on site, you can actually make backup power far more efficient. In some cases, we’re seeing in the architecture diagrams, we’re going in and actually replacing diesel gensets, which is very exciting, both from an OPEX and a CapEx standpoint for the data centre developers and hyperscalers”

The third application involves power smoothing. This includes using battery storage systems as a shock absorber between the data centre load and either the grid or on-site generation. However, Monday suggests this particular use case may have a limited lifespan as GPU technology evolves.

“While it’s front of mind today, I think in the next five to 10 years, they’ll actually solve that at the GPU level,” he adds.

Critically, once power smoothing is addressed at the chip level, Monday expects hyperscale operators to repurpose that battery capacity for participation in the grid market.

“Once that gets solved, we’re finding that our more innovative developers or more innovative hyperscalers are going to use that reserve capacity to trade back into the market, which helps kind of round out the investment case for data centres.”

That evolution would transform data centre battery systems from purely facility-serving assets into active providers of grid flexibility, with significant implications for wholesale electricity markets.

Siemens partnership and the standardised blueprint

Fluence’s data centre strategy relies heavily on partnerships with infrastructure providers already embedded in the hyperscale supply chain.

On the morning of the interview, the company announced a collaboration with Siemens to integrate battery storage into standardised data centre designs.

“It’s a bit of a team sport,” Monday says.

“Siemens is building out their blueprint of what a data centre infrastructure looks like. They work with partners like Nvidia in scoping that. They put together now what is a 100MW blueprint and will be participating in the 1GW blueprint as they get greater in size.”

As data centres scale, the three use cases Monday outlines become increasingly critical.

“The speed to power, the power bridging and the data or the load smoothing, becomes increasingly important. That’s why they chose Fluence as the BESS solution, specifically to help address those demands,” he adds.

For the Australian market, Sam Markham, Fluence’s growth and commercial strategy manager for Australia, suggested the trajectory will largely follow developments in the US.

“It’s still a really rapidly evolving issue. I think what we’re really seeing is that the US and the use cases Jeff just described are leading the way. And then I think in Australia, it will just be whatever Silicon Valley decides we’ll start to see over here, obviously tailored to our market.”

NEM frameworks and the inverted baseload challenge

While data centres represent a major opportunity for battery storage providers, they also pose regulatory challenges for the National Electricity Market (NEM), which has historically been designed around dispatchable thermal generation and variable renewable energy, rather than large, constant loads with specific reliability requirements.

Markham notes that the Australian Energy Market Commission (AEMO) released draft access standards for data centres, referred to in regulatory terms as “inverted baseloads”, earlier in March.

“Data centres are a really big, important part of our infrastructure in the future. It really funds our way of life,” Marham says.

“For that reform, specifically, I think the devil’s in the detail.”

The draft standards propose different requirements based on facility size, with distinct thresholds at 30MW and 100MW and above. Markham emphasises the importance of getting these frameworks right from the outset, drawing lessons from earlier reforms targeting generation rather than load.

“What we saw a few years ago on the generation side was we had these really interesting reforms come in for system strength and self-remediation at your network point, and that really drove some massive innovation in grid-forming batteries,” she says.

“But now we’re looking at some tweaks to those frameworks to make sure they’re fit for purpose in the future. So, I think any lessons that we can get from what we’ve done in the generation space and applying that to loads would be really beneficial if we could get that right now.”

The regulatory evolution will be critical to enabling the rapid data centre scaling that Monday anticipates, particularly as battery storage becomes an integral component of data centre infrastructure rather than an optional addition.

Grid forming: from optional to essential

Beyond data centres, the conversation turned to grid-forming (GFM) inverters. This technology has moved from niche application to market standard in Australia as coal-fired generation retires and system strength requirements intensify.

Markham describes how system-strength rules introduced several years ago effectively mandated a shift to grid-forming technology for new battery storage projects.

“That made the switch from grid-following to grid-forming from all our customers, effectively overnight,” she says.

“The focus to date has really just been on avoiding that system strength charge that comes from not choosing to remediate the grid impacts of your connection around the network.”

However, the current regulatory framework focuses primarily on providing a stable voltage waveform, which is only one aspect of what grid-forming inverters can deliver. As transmission network service providers (TNSPs) begin procuring system strength and inertia services, the technical and commercial frameworks are evolving.

“The AEMC has initiated a rule change request from AEMO and also from industry, so Clean Energy Council, Australian Energy Council, looking at just that,” Markham says.

 “How can we make those procurement frameworks bankable? How can we get them consistent? And also, when it comes to technical standards, what are they?”

Fluence has responded by expanding its grid-forming engineering team in Australia.

“In the last two years, we’ve gone from just one grid-forming engineer to six,” Monday says.

“We see that Australia is really leading the way here. We plan to take the playbook that we’ve developed here in Australia, and we’re scaling that now in the US, UK and Germany markets, as we’re seeing more and more of those projects start to shift to grid-forming as well.”

Markham adds that the six-person team is working closely with AEMO, TNSPs and customers to define what grid-forming capabilities will look like once procurement models are finalised, and to anticipate global requirements.

“Because we’re leading the way in a lot of ways in Australia, what are potentially the grid-forming requirements that we’re going to have globally? And how can we get ahead of that and help our customers on that?”

From a commercial perspective, Monday notes that grid-following projects are becoming rare.

“I see very few projects going up that are going to be grid-following. And so, grid-forming is really helping round out.”

Smartstack and the shift to longer duration

The company’s anticipated Smartstack deployment in Australia represents another significant milestone. The modular system, already deployed in grid-following configurations in other markets, is being adapted for grid-forming operation to meet Australian requirements.

“It is genuinely a game changer when it comes to speed to deployment. You can take it in five parts,” Markham says.

The system is designed for high energy density, with Monday noting that “we’ll be able to get a 10MW block in a 24-foot enclosure, which is leading in the industry.”

That density is particularly relevant for data centre applications, where space is often constrained.

“We’re able to ship it in five parts, which means we can do that as a non-permitted load and put that BESS solution in places that basically we haven’t seen BESS go before,” Monday says.

Smartstack is also designed as a genuine 8-hour duration system, reflecting the broader market shift toward longer discharge capabilities.

“A couple of years ago, looking at a 2-hour solution, 4-hour is now the norm, and in a few years, we’re looking at 8-hour,” Markham says. “So, to be able to fit more and more megawatt hours in the same space, I think, is really impactful.”

Interested in Australia? Read Energy-Storage.news’ Energy Storage Summit Australia coverage and related content.