Central U.S. electric utility giant American Electric Power (AEP) will try to satisfy a sizable portion of its future data center load growth with fuel cell technology.
Bloom Energy could supply up to 1 GW of solid oxide fuel cell (SOFC) capacity to AEP over the coming decade. The deal, which starts with an initial order of 100 MW in SOFCs next year, was touted by both companies as the largest commercial utility fuel cell supply deal yet.
Bloom Energy previously has worked with AEP on SOFCs for commercial and industrial customers. This new supply deal is aimed at meeting the energy needs of data centers in central Ohio.
Earlier this year, AEP revealed in an earnings call that it has about 15 GW of load commitment from incoming data center projects over this decade. The rise of artificial intelligence training models is pushing data center electricity demand exponentially.
“The rapid increase in energy demand is a challenge that AEP is tackling by finding innovative solutions to meet the unique needs of our customers,” AEO CEO and President Bill Fehrman said in a statement. “These fuel cells will help provide data centers and other large customers with the power they need to quickly expand in our regulated footprint as we continue to build infrastructure to deliver reliable energy for all our customers.”
Fuel cells convert fuel such as natural gas or hydrogen into electricity through an electrochemical process. Hydrogen does not contain carbon in its chain so does not emit CO2 when combusted.
“AEP will deploy the SOFCs as a customer-sited resource where there are delays/constraints in delivering 100% of a customer's power requirements via the grid,” according to Bloom Energy. “The SOFCs can be deployed as supplemental grid power or as a microgrid.”
Bloom Energy’s SOFC technology also is contracted by other data technology facilities. The company recently announced an agreement to help power Quanta Technologies’ facilities in northern California.
The AEP deal is unique among utility power generation transactions. Data giants such as Quantas, Microsoft and Google are seeking lower or carbon-free resources to power their facilities.
“I am delighted that there is strong market recognition that the Bloom Energy platform is the ideal choice for powering AI data centers. We are thrilled to be working with AEP as they lead the charge to bring innovative solutions to the transforming electricity market,” said KR Sridhar, Founder, Chairman, and CEO of Bloom Energy. “With our proven track record of more than 1.3 GW deployed, and a fully functional factory that can deliver GWs of products per year, we are ready and able to meet this rapid electricity demand growth.”
The initial SOFC power generation for AEP will be fueled by natural gas but could eventually mix in carbon-free hydrogen. Even so, Bloom Energy says, the SOFC process reduces SOx and NOx emissions (sulfur and nitrogen oxides), in addition to lower carbon dioxide.
AEP owns and operates electric utilities in multiple states connecting 5.5 million customers. These include utility operating companies in Ohio, Kentucky, Michigan, Indiana, Virginia, West Virginia, Texas and Oklahoma.
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