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This is partner content from Latitude Studios. Kishin Ponnidurai and Kamen Berg spend their days thinking about the hidden hardware that makes clean power work. Things like recombiners, load-break disconnects, and cable bus systems. Their world is highly technical, but ask them what they do, and they make it sound deceptively simple. I build product that allows the movement of energy, very simply put. Mostly I tell people I help sell electrical equipment out in the market. They work at Scholz Technologies Group, which has spent 30 years building the electrical systems that move power from solar fields, and more recently, through big battery projects. Kishin is a product manager for battery storage. His job starts when a customer shows up with a power problem. What we're trying to figure out is what do they really need from a DC distributor? Whether it's protection, aggregation, isolation, so on and so forth. Kamen works on the other end of that process. He leads business development for battery storage and data centers, talking with customers about those problems, and bringing the interesting ones back to Kishin. And then on the flip side of things, if an opportunity comes my way, I'll mull it over, but then I'll typically bring it to Kish, and Kishin will help me determine whether or not it's really something viable that we want to do for our business. We're trying to figure out what problems people are experiencing. So it's not just, hey, what sells or what can we build? It's, hey, what are you guys facing that people aren't seeing or that we're not seeing? Lately, the most interesting problems are coming from data centers, a market that is moving so fast, the power design choices are constantly shifting. Every day, there's another opportunity to look at something new. Somebody thinks they have an idea of what the solution looks like, they can come to us, and then we can decide whether or not that is a solution. And then in three months, they'll tell us they completely changed their mind and the architecture is totally different, but we'll adjust to that, too. It's a true story, that's why I'm laughing. When we hear data center, we tend to picture giant buildings, rows of blinking servers, or massive cooling equipment. But an entire electrical ecosystem is sitting between a data center's power source and GPUs. And right now, there is surprisingly little agreement about what it should look like. When we say it's the Wild West, what does it actually feel like from Shoal's perspective? I think hectic's a good way to put it. I mean, it's growing crazy fast. Steven, I was just going to say, you're a runner now, right? So you buy a pair of shoes, and then in three days, you need a new pair of shoes. That's what it feels like right now, working with all these customers. It's the Wild West because there's a lot of solutions to a problem. And we're at the infancy stage right now of like, which one is the right one? And that's what we're all trying to figure out together right now. Big questions about how power should run through data centers are still up for grabs. And the answers will determine how much equipment is needed, how quickly it's built, and how much floor space is left for servers. All the customers that we're looking at right now are doing something different. And that's not an understatement. Everything that we're working on right now is different. You know what isn't different? DC distribution. And that's why we're in a really cool place. After three decades of building DC systems for solar, and later, batteries, Scholz considers storage for data centers as the next frontier. The opportunity is, in some instances, maybe even more significant than what we're seeing in the utility scale space for battery storage. Batteries and data centers are changing fast. They used to have one job: keep servers on until backup generators kicked on. But today, they're being used to smooth out volatile loads, support on-site generation, and buffer the grid. And that changes the power system around it. In this episode, produced in partnership with Scholz Technologies, Steven Lacy talks with Kishan Ponnadurai and Kamen Berg about the expanding role of batteries inside AI campuses, the shift from AC to higher voltage DC, and how to navigate a market that is constantly changing. A lot of times, data centers need to move quick, and that means the vendors, the manufacturers, also need to move quick. That's what this industry is. I want to dig deeper into batteries now. So, batteries have been in use in data centers for a long time, for UPS systems. Kish, what is different about the way batteries are being deployed now, the role they're being asked to play, and ultimately, how does that feed into product decisions? Yeah, you take a look at batteries historically within data centers, and typically what you're seeing is a UPS room, right? It's a room that exists on the data center site. It's inside the data center or inside a room on a data center. And it's use case is for very minimal things. It's to take on the initial downtime so that a diesel generator could get back up and running and provide the brunt of the power that the data center needs. The problem with this is that it could never live up to the scale at which data centers today are being built, specifically AI data centers. So, keep in mind that a UPS room and a diesel generator still has presence in the market. Just for very specific data centers. When we're talking about the data centers that are making headlines today, those are not your average data centers. Those are large gigawatt scale data centers dedicated for artificial intelligence. And I think one thing that is a problem that we've experienced in those data centers is how volatile the power draw is. So, your typical UPS room provides two problems to this system. A, it's taking up room for more compute. You could use that for a couple more racks, more than a couple more racks, right? But racks are racks. Capacity is capacity. The second problem is they're too small to withstand the volatility of the power draw of an AI data center. So that it couldn't even take on the buffer for a diesel generator to really turn on. How we're looking at batteries today is scaling those batteries and putting them outside the data center. More similar to what you would see in a utility scale energy plant, right? Very similar concept. Diesel generators still can be in play. They can be used as a secondary. But the battery outside is where we're all going. Well, if we're moving batteries outside, what I would bet on is a technology that's able to increase power density immensely. How can you inject as much power via batteries while keeping the footprint smaller? You know, taking a look at energy storage now within data centers, it's no longer just an afterthought. It is, we're going to need this to handle the volatility of an AI load. It's going to need to be a buffer for a grid because the grid and the diesel generator itself cannot take on the volatility of the AI load. And that's kind of where we're at now. All these different battery chemistries. All these different ways of installing batteries on a site. Use cases on how you're using inverters. All these different concepts coming into play. It's no longer just, hey, maybe we can add batteries. It's, we need batteries. Yeah, Kamen, any commonalities among what you're hearing from customers? Like when they come to you and they're figuring out how to deploy a battery, what it's going to do. What are they actually trying to solve? I mean, they're trying to solve exactly what Kish is trying to solve. Exactly what Kish is talking about, right? And there's the data center side of this where we're talking about immense power draws. Sometimes to what Kish alluded to, right, we're talking about immense power drops, which the grid obviously can't handle. And that's why we see the ride through requirements that we have now. But then there's just, we can go back to just general generation and the stability of our own grid, right? I live here in Nashville. And we have had some very serious winter storms the past couple of years. We had a huge ice storm this past winter. 300,000 people were without power at one point. A couple of years before that, we had an immense ice storm, just a general winter storm where there were rolling blackouts. And so the grid needs batteries. And the grid needed batteries prior to this. And so when customers come to me, they're typically trying to figure out a few things. A, if I'm talking about just power developers, they're probably focused on how do we put just batteries online and put them on the grid. But if I'm talking to somebody a little bit tighter to the data centers, they're trying to figure out where does my battery actually fit in the system. And so you can talk about the generation side of the data center. Or you can talk about the medium voltage UPS side of the data center. And those today are typically two different applications. Yeah, what kind of challenges does that create if those teams are not talking to each other? To me, it seems like a missed opportunity for the power developers to not be talking to the medium voltage UPS folks directly. right because let's say we have a data center and let let's just say for clean numbers we have a gigawatt maybe there's an announcement about it having 250 megawatts worth of battery on it but that data center is probably going to have two full gigawatts of battery in a ups system what i do know is that a ups system maybe it utilizes a one-hour battery but i know that a two-hour battery doesn't cost twice as much and so why not utilize some of that space maybe to put in something like a two-hour battery or a four-hour battery that can be utilized by the power developer and you just keep a certain amount of that you know in reserve for those backup power needs there's an interesting concept here right like you always think of behind the meter in front of the meter it's in my opinion i mean without with how big these these sites are getting you know right why not both because in this case right you're you're you're building a gigawatt worth of power right that's bigger than a lot of these utility scale sites that are coming up and in a way that's going to help the grid more than just you know more than just a buffer really it's what can we do more with it i'm kind of curious um what your observation is kish about the types of teams that are working on power infrastructure decisions you know they're building uh power infrastructure fit for a small city many of them i think have probably very sophisticated teams some not so much tell me about the types of people that are actually making these decisions and the types of people that are actually making these decisions and the types of people that are actually making these decisions and the types of people that are actually making these decisions and the types of that they're being asked to grapple with maybe sometimes for the first time so you know the data center ecosystem is quite interesting right it's you you have the guys that are that are financing these big projects right those are the uh the hyperscalers that you hear of today then within that you have the people who are contracted out by them to to do the construction and the people that are doing the construction are not experts in everything so they'll go and piece together piece together piece out here's what we want to do for this data center here's the energy section here's the white space section here's the gray space section and they'll go and find these different vendors that that are very specialized in in these types of things and that subcontracted at work turns into 10 15 16 20 different subcontractors all working on very specific components of this data center you have people from different walks of life industries coming together to work on to work on these problems but going back to kind of what relates to us is well you know we're obviously part of the energy infrastructure and we work very closely with other companies that offer larger energy solutions but they need a very specialized component and and that's how we fit into that you you look three steps adjacent to us and you have 10 different people working on the piping the conduit the conduit the conduit concrete uh anything vertical is different from people that are working on the horizontal there's so many people working on these data centers it's it's actually amazing it can be tough not not just for for somebody on our side but as a developer owner and operator right there's no way they could they could manage all of those people themselves um i think the thing that needs to be focused on though is making sure that the important decisions and the people involved in those high-level decisions aren't getting siloed off um and that they're communicating appropriately let's talk a little bit about the types of batteries that you're seeing these data center operators and developers choosing what are the chemistries you're hearing people talk about and consider yeah you know the the two the three main that you know we've been involved with uh at least have had tons of conversations around are going to be iron air batteries um the the another one is the sodium battery i mean the sodium battery has been a topic of discussion for a very long time but i think we're starting to see some some newer developments on salt batteries that that can i would say better compete with uh the traditional lithium ion and then we're also looking at redox batteries or in other words a vanadium flow battery and and all these all these batteries have different installation methods different footprints different capacities all offer the same solution though overall which is which is power generation um so i think as we start to look at all these infrastructures all these different battery technologies and chemistries it's it's learning more about how they're streamlining their production um how they're making it repeatable so that you can scale it just keeping track of all these different technologies or chemistries i should say to see how how they can compete when it comes to scaling as large as lithium ion yeah so how does that change the sizing of the system the voltage like these are all very different size and duration batteries so like how does that feed into the actual components and architecture itself yeah so i mean when you're when you're talking about iron air and vanadium flow you know you're typically talking about a much larger footprint for that battery to equal the a smaller footprint of lithium ion what that means is you have to really allocate square footage on your data center site to to have that capacity um you know there's the the discussion of building up versus building horizontal um so that's that's one route that people are looking at stacking batteries um but but overall um how you fit your your footprint on the data center um that needs to be talked about with these developers that are that are building the data centers the one thing i will say is that these specifically the companies that we've been talking to on these new chemistries they all all are operating in dc batteries right so so they're dc out batteries um and i think that's by design for power quality and as we move into you know 800 volt dc architecture 1500 volt dc architecture um they're ready to go so does it change the architecture of energy distribution not entirely but does it change how developers have to plan for battery generation on their site and matter of fact i think that's a really good question because i think that's a really good actually to that point can you talk about how electricity like flows into a data center and through the data center um and what conversion looks like within the data center before it reaches the servers so taking a look at at distribution of energy for a traditional data center site um it's it's it's very different from what we're seeing today um so typically you have dc power generation that's coming from the battery coming from wind coming from solar that's being fed into a grid grid substation what have you that substation typically has a transformer that will convert that dc power generation into ac power generation and from there that transmission of energy can then get sent to the site and the site should have a means to receive that medium voltage from there um the medium voltage uh transmission will then move to the site where then you will be able to send that medium voltage to the site and then you will be able to you will want to move that from a medium voltage uh voltage to a low voltage to where your data center can can run on that 480 volt um ac um and so you're going through a couple conversions to get there and then inside your your ups room if you are running ups batteries you have rectifiers that will change that dc voltage to ac voltage um so a couple conversions that are happening there in a new data center what we're looking at today and and with batteries being external you're still going to have your dc voltage and your dc voltage and your dc voltage and your dc voltage and your medium voltage uh balance system to receive the power from the substation but now we're feeding it through inverters uh we're feeding it through batteries we're feeding it through a lot of components before it gets to the data center um and really what we're doing here is providing a means for batteries to be a buffer for the grid right like i had mentioned earlier all this to say is in an ac data center you go through a lot of conversions as we look at what an 800 volt dc data center looks like there's a lot of possibility to where we can cut down those conversions conversions offer efficiency drops right if you look at a component like an inverter a converter one of those um you're looking at a power efficiency at around 98.7 um 90 sometimes 97.5 in that range um and when you're talking about a gigawatt of power that that three percent or that three percent is going to be going to be going to be going to be or that two and a half percent makes a huge difference and so as we move into dc data centers if we can cut down the conversion loss or the inversion loss um you can drastically improve your power quality over time cayman are you seeing any standardization here around power blocks or is is does everyone treat this like their own unique snowflake everyone's got their own roses right all the all the flowers look the same from a distance but you you come up on them and they're not they're not there are dc blocks um you know in the solar space ample inverter sizes. They're pretty standardized around five megawatts. But when we start getting into especially the sizes of some of these, let's call them non-traditional batteries, those DC blocks can range from 500 kilowatts to sometimes three megawatts. It all just depends how they did their original design. Then we get into the architecture of what everybody wants to do on the inside of the data center, and that's also completely different. Like I said earlier, everybody's kind of taking a bet on what this is going to look like, right? Are we going AC all the way in and then converting to DC? Are we bringing the DC all the way into the white space and through the building directly to the rack? What does that look like? It all looks, like I said, the same from a distance, but it is all very different when you get into the nitty-gritty of it. So if we consider this transition to 800-volt DC, what other products are you working on? When we look at switching over to 800-volt and the power distribution aspect of right, we have the busway system that typically sits above the racks today. We believe that we can use that same cable bus system to bring power to the racks to ultimately generate something that's more safe, easier to install, and potentially a quicker timeline. Because the busway guys are full. They're at capacity, and so is everybody else. But specifically for 800-volt, open-channel busway isn't going to make a lot of sense for people, especially when we talk about safety. The biggest concern being arc flash. And so by utilizing something that is already out in the industry today, we've deployed almost 100 gigawatts worth of that material out into the market, and is already out in the industry today, we've deployed already being used in a 1500-volt ecosystem. We think we're bringing a benefit potentially to the market that eventually could connect both systems and parts of the product, right? If we have our power distribution outside with our medium-voltage UPS, cable's going to get fed in, and then potentially even a DC PDU system that would feed out into this, what we're calling, air link system as well. Yeah. The idea here is that we have a suite of products right now focused on DC distribution. The power hub can be built to work with a UPS system, but it can also be built to distribute power to many air link systems at the same time, or a singular air link system, depending on how much power the rack would be. So as we look at the ecosystem for 800-volt DC and 1500-volt DC, we're ensuring that we can take more of that distribution product suite. So, you guys are, you have a front row seat to many of the decisions that are happening inside these data centers. If we move out a few years to the end of the decade, what pieces do you think will change the most over the next few years? Generally, I think the footprint of these data centers is going to change significantly, right? I think one of the interesting things that I'm seeing is when I worked in EV, we went from 48-amp chargers overnight. A lot of people still use them today, right? You can just sit in your garage all night and it'll charge up appropriately. But we were using those in commercial applications. And within, it felt like, a year and a half, maybe two years, we hopped up to a megawatt charger and discussions around those. That's what's happening today inside of the data center. And so, the difference is, we're going to be able to do, you know, what's 10 racks and 100 kilowatts today can suddenly be done by one megawatt rack, right? And there's other questions around, are there diminishing returns, right? Do you replace that entire space, right? Do you put 10, one megawatt racks in there? Do you put 10, one megawatt racks back into that row to fill up that space? Or do you suddenly only need three? And I think the answer is you will only maybe need the three. And so, we'll get smaller and smaller. In order to do that, though, from an architecture standpoint, you are going to have to see this transfer over into DC. And so, 800 volt is going to happen. It's happening right now, I should say. You know, what I think will be the next step will probably be 1500 volt, right? The renewables industry has been set around 1500 volt for years now. And ironically, we've talked about, in the renewal space, 2kV. And so, you may see, as renewables steps over to 2kV, the data industry might say, why don't we do the same? Quite frankly, the data center world should have probably started with 1500 volt DC as the preliminary discussion. So, it's pretty funny that we're starting at 800, but I don't know, maybe another hot take there. Any other changes, Kish, that you see on the horizon? What do you think this market looks like in 2030? Yeah. I mean, look, the demand, like I said, is going to be there. But I think the scary thing, maybe not so scary, but the thing that, you know, has my eyebrows raised is the pace at which data center demand, energy demand is growing is far going to outpace the utility scale growth. What I mean by that, to be very clear, I think the capacity, utility is still going to be very, very high. But the rate at which utility is growing versus data center demand, it's night and day. And so, I'll go back to the discussion of behind the meter, front of the meter. If we're building these sites to be sized for a gigawatt, two gigawatt, 2.5 gigawatts, why don't they offer services in both fronts? Well, it is certainly a wild time. And I know you guys are right up close and personal to it. And I really appreciate your time and insights here. Kishen, good to see you. Yeah. Yeah. Likewise. Thanks. Thanks for having us on. It's really great to be talking about this with you and just really excited for this industry. Kamin, thank you. Steven, thanks for having us. We appreciate it. This episode was produced in partnership with Scholz Technologies Group. For 30 years, Scholz has designed and manufactured the electrical backbone for critical energy infrastructure. The company builds simple, reliable solutions for complex power challenges across solar, energy storage, and data centers. Visit Scholz.com to learn how Scholz solutions are helping power data centers. Thank you.