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(Bloomberg) — Redwood Materials launched what it says is the largest deployment of reused batteries globally on Thursday. They’re powering a data center operated by Crusoe Energy, a member of OpenAI’s Project Stargate.
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Demand for clean, reliable power is increasing, spurred by the rise of data centers powering artificial intelligence. Grid-scale batteries are key to fulfilling this demand and supporting intermittent renewables.
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The 2,000-GPU data center is located on Redwood’s Sparks, Nevada, campus where the firm runs a large battery recycling operation. The storage system uses hundreds of repurposed EV batteries, according to Cal Lankton, the company’s chief commercial officer. Solar panels help provide electricity for a system with 12 megawatts of power and 63 megawatt-hours of capacity. That’s enough to power about 9,000 homes. The system is the largest microgrid in North America, according to Redwood.
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Data centers are putting a greater strain on the grid. A new BloombergNEF report published Wednesday found that their energy demand in 2024 was equal to 1.4% of global supply. Nearly half of all data center capacity is in the US.
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Founded in 2017 by Tesla Inc. co-founder JB Straubel, Redwood recycles, refines and produces battery materials and is one of the biggest battery recyclers in North America. The end-of-life electric vehicle packs and modules it takes in are no longer suitable for transportation due to demand for greater range and better battery health. But they’re still usable for grid-scale storage, Lankton said, which will be the focus of its new division dubbed Redwood Energy.
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“Think of this almost like a retirement home for these batteries,” Lankton said of the new installation. He added that Redwood’s reused batteries are half the cost of new lithium-ion systems but offer the same performance. That’s possible, he said, because stationary storage is less hard on the batteries than powering an EV. When paired with renewable energy sources like wind and solar, stationary energy storage systems help stabilize the grid while reducing costs by smoothing out fluctuations in power demand.
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Redwood generated about $200 million in revenue last year through its recycle operations, and Lankton said the company expects a “meaningful increase in revenue in the back half of 2025 as we deploy more storage projects.” He declined to name customers of upcoming projects.
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