The Redwood-Crusoe Partnership has launched the world’s first AI data centre powered by repurposed electric vehicle (EV) batteries. Located in Nevada, the project aims to tackle two major environmental challenges: the soaring energy demands of AI infrastructure and the mounting stockpile of retired EV batteries.
By deploying second-life battery energy storage systems, the Redwood-Crusoe Partnership offers a scalable, low-carbon solution for powering AI workloads. This collaboration represents a significant step toward building sustainable AI infrastructure while advancing circular economy principles within the tech industry.
Breathing New Life into Retired EV Batteries
Bloomberg reports that Redwood Materials has launched a bold new venture, Redwood Energy, focused on repurposing used EV batteries. The Redwood-Crusoe Partnership aims to transform retired electric vehicle batteries into low-cost, scalable energy storage systems for broader energy applications.
Redwood believes the useful life of batteries continues well beyond their automotive use, offering untapped energy storage potential. Many battery packs collected through Redwood’s recycling operations still retain over 50% capacity, making them ideal for repurposing instead of recycling.
Former Tesla CTO JB Straubel founded Redwood in 2017, and it has since become a leading battery recycler in North America. Now, the company uses its large stockpile of decommissioned batteries to develop modular microgrids for clean energy storage and delivery.
These microgrids store and distribute energy from renewable sources like solar and wind for off-grid or hybrid power applications. Redwood’s approach combines recycling, sustainability, and infrastructure to support the growing demand for resilient, low-carbon energy systems.
Straubel emphasises the economic and environmental benefits of repurposed batteries, which cost less than new lithium-ion systems with similar performance. He notes these batteries perform especially well in stationary setups, where usage demands are lower and conditions are more stable.
The newly launched division builds on Redwood’s capacity to collect over 20 GWh of batteries annually, about 250,000 electric vehicles. Redwood tests each battery for potential reuse and integrates usable packs into modular storage systems for grid or independent operation. Once these repurposed batteries reach the end of their secondary lifecycle, Redwood recycles them to support a fully circular system.
Redwood’s Microgrid and the Crusoe Collaboration
Redwood’s battery repurposing initiative centres on a strategic partnership with Crusoe Energy, now shifting from crypto mining to AI infrastructure. Together, they have deployed North America’s largest microgrid powered by second-life batteries, marking a major milestone in energy innovation.
Redwood built the two-acre microgrid at its Sparks, Nevada, campus using 792 retired EV batteries and a 20-megawatt solar array. The system delivers 12 megawatts of power and 63 megawatt-hours of storage to support energy needs sustainably and efficiently.
It powers a modular data centre built by Crusoe, equipped with 2,000 GPUs to handle real-time AI workloads. Now fully operational, the facility sources over 99% of its energy from the microgrid, relying on the grid only during prolonged clouds.
This project reflects a growing trend of placing AI infrastructure near renewable energy sources to support off-grid or hybrid operations. With AI data centre energy use set to double by 2030, Redwood’s scalable, low-carbon model offers a timely solution.
Insights from this Nevada deployment may guide similar expansions nationwide, including Crusoe’s upcoming 100,000-GPU AI hub for OpenAI in Texas and projects in tech hubs like Virginia and the Midwest.
Redwood’s approach stands out for its speed and affordability. Completed in just four months, the microgrid is already profitable, with costs at $100–$200 per kilowatt-hour, about half that of new lithium-ion systems. This cost advantage and energy independence make it a strong solution for high-demand sectors.
Scaling Circular Infrastructure: Redwood’s Broader Impact and Future Plans
Redwood is redefining the value of retired EV batteries by repurposing them for grid-scale storage instead of recycling them prematurely. The company leverages its battery supply, technical expertise, and infrastructure to extend battery life and reduce energy system costs.
This strategy gives Redwood a first-mover advantage in the expanding market for scalable and affordable clean energy solutions.
Moreover, Redwood is expanding its vertically integrated battery operations with a South Carolina plant targeting 500 GWh output by 2030. The new facility complements Redwood’s Nevada hub and supports its growing clean energy and energy storage ambitions.
Redwood Energy microgrids, built from repurposed EV batteries, are scalable for AI data centres, utilities, and commercial applications.
These systems already generate enough energy to power over a million homes for an hour using second-life battery technology. At the microgrid-powered launch event, Straubel emphasised Redwood’s mission to make repurposed batteries a central clean energy growth engine.
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