American Electric Power will meet data center power demand with what it calls the largest utility initiative of its kind in the nation, buying up to 1 GW of Bloom Energy’s solid oxide fuel cells.
AEP and Bloom announced the agreement Nov. 14. They said the fuel cell units typically will be used to allow data centers or other large energy users to quickly power up new or expanded operations while the grid is built up to meet their demand.
Also Nov. 14, AEP subsidiary Appalachian Power announced it will explore a different technology: It plans to build small modular reactors in Virginia. It will start the early site application process for an installation near one of its substations in the south-central area of the state.
Fuel Cells
AEP said it previously used Bloom’s technology to power customers and is in talks for new customer agreements. All costs would be borne by the large customers who would use the electricity.
Bloom said the full 1 GW agreement would be the largest commercial procurement of fuel cells worldwide to date. It said AEP has placed an initial order for 100 MW of fuel cells, and said further orders are expected in 2025.
The two companies said these fuel cells initially will operate on natural gas but could use hydrogen as an alternative fuel, or any blend of natural gas and hydrogen.
They said carbon dioxide emissions would be 34% lower than present-day displaced marginal generation resources in the PJM interconnection.
The fuel cells will be placed on-site where AEP’s customers operate and will be designed to not send any power to the grid. They will be required to meet local interconnection rules, and AEP will work with regulators to secure needed approvals.
AEP is in the final stages of negotiating the first customer project agreements. It expects its commercial load to grow an average of 20% annually over the next three years, driven by data center development.
“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,” AEP CEO Bill Fehrman said in a news release. “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.”
Bloom CEO KR Sridhar said the company has more than 1.3 GW of its products deployed and has multi-gigawatt annual production capacity for its Energy Server, a modular plug-and-play box that can serve as baseload power.
“I am delighted that there is strong market recognition that the Bloom Energy platform is the ideal choice for powering AI data centers,” he said in a news release. “We are thrilled to be working with AEP as they lead the charge to bring innovative solutions to the transforming electricity market.”
Bloom Energy stock exploded after the announcement, closing 59.2% higher in extremely heavy trading Nov. 15.
Advanced Nuclear
Appalachian Power’s announcement that it wants to build small modular reactors (SMRs) in Virginia also was keyed to future electricity demand.
Given that SMR designs still must be perfected, gain approvals, secure a fuel supply and be scaled to the point of commercial viability, the time frame is likely to be a bit longer than that envisioned in the AEP-Bloom agreement.
Appalachian did not say what type of demand it expects to drive the need for the SMRs it wants to build.
However, it has identified a potential site outside of Lynchburg on company property surrounding a 765-kV substation.
This would be almost next door to BWX Technologies, a major supplier of nuclear components and fuel that is the lead contractor designing a portable microreactor for the U.S. Department of Defense through Project Pele.
AEP CEO Fehrman and Appalachian President Aaron Walker spoke of the utility’s SMR initiative as a cooperative effort with states and thanked Virginia Gov. Glenn Youngkin (R) for embracing SMRs.
Appalachian’s news release quoted Youngkin: “Advanced nuclear power is at the heart of Virginia’s All-American, All-of-the-Above Energy Plan, a plan that prioritizes abundant, reliable, affordable and increasingly clean power to fuel our thriving and growing economy.”
Appalachian said it would file an application with the Virginia State Corporation Commission in the spring of 2025; would seek funding under the U.S. Department of Energy’s $900 million grant program to accelerate development and reduce cost of SMRs; and would work with regulators and stakeholders to educate the community and gather feedback.
