Dense, complex, and fluctuating – supporting AI workloads is driving a data center power dilemma. The race to keep up with rapidly evolving technology and build AI-ready facilities has placed unprecedented strain on data center infrastructure, and crucially, on the electrical grid.

As AI continues to rise at pace, the central question is: Where will we find the power to fuel these energy-intensive workloads? To alleviate pressure on the electrical grid and maintain the pace of innovation, operators must look to alternative energy sources – and fast.

One of the most promising tools is fuel cell technology. Fuel cells convert stored chemical energy directly into electricity with high efficiency and virtually no emissions. This allows for fast and reliable onsite power generation that not only alleviates reliance on the grid but also contributes to sustainable operations.

Bloom Energy is dedicated to driving this shift, providing onsite power solutions that operators can rely on. Bala Naidu, vice president of energy transition, energy and power markets at Bloom, shares insights on how fuel cell technology has become a viable solution for data centers looking to stay ahead in the AI race.

Getting to know fuel cell technology

Unlike traditional combustion engines, which rely on rotating machinery and emit significant greenhouse gases and criteria pollutants, fuel cells generate electricity via a non-combustion process.

Chemical energy is converted directly into electricity with no moving parts. Initially rising to prominence in the space industry during the 1960s and 1980s, fuel cells have evolved significantly since their early days.

“Today’s high-efficiency solid oxide fuel cells operate at high temperatures close to 60 percent efficiency,” says Naidu. “They can run on a variety of fuels such as natural gas, biogas, and hydrogen, delivering power at a cost comparable to electricity at point of use.”

Modern fuel cells come with a host of benefits: minimal emissions, quiet operation, high power density, excellent load-following capabilities, and a modular architecture that makes them scalable and adaptable.

They also offer power autonomy. Onsite generation means access to clean energy, fast. Generating power at the point of use to supplement the struggling grid means taking control of energy reliability and availability, and managing rising demands first-hand.

Inside the Server

The Bloom Energy Server uses fuels such as natural gas to generate electricity through electrochemical oxidation. That fuel is reformed into hydrogen internally and then combined with oxygen, producing electricity and water in the process.

Because the system isn't constrained by the limitations of thermodynamic cycles, it achieves electrical efficiencies exceeding 60 percent. When waste heat is captured and repurposed – a process known as combined heat and power (CHP) – total efficiency can climb to 85 percent or more.

This onsite generation model eliminates transmission losses, bypasses the long wait times for new grid connections, and is often more economical compared to fluctuating grid prices.

Going mainstream

With grid access a primary bottleneck for data center development, the ability to deploy fast, reliable power as and when it's required is now essential. This need is accelerating the adoption of distributed energy solutions. But what makes fuel cells particularly suited to supporting AI?

“Fuel cells come with supercapacitors to help meet AI load profiles,” explains Naidu. “That means when power demand is low, the supercapacitor can store energy to be released during periods of greater demand.”

AI workloads are known for being complex and highly variable. The ability not just to source sufficient energy, but to manage it in real-time, is critical. Fuel cells are designed to handle these unique load profiles reliably.

Scalability is another key advantage. Bloom’s onsite solutions can support anywhere from a few megawatts up to 500MW of power. Thanks to their modular design, fuel cell systems can scale seamlessly with increasing demand. They’re also quick to deploy and, if necessary, redeploy to other locations, providing built-in flexibility.

Naidu highlights another important differentiator: “Other alternative power solutions, such as reciprocating engines and turbines, emit high levels of pollutants. They’re very noisy, and due to current supply chain constraints, are often not readily available. Battery technology is developing, but it remains primarily a short-term energy solution.”

Fuel cell systems come in various chemistries, including proton exchange membrane (PEM), phosphoric acid (PAFC), and molten carbonate (MCFC). Bloom’s technology is based on solid oxide fuel cells (SOFC), which operate at high temperatures and can use standard pipeline natural gas directly. This results in the highest efficiency among competing fuel cell technologies – delivering clean, reliable, and cost-effective power.

It’s no surprise, then, that onsite generation is emerging as a key strategy for tackling the industry's dual challenges of power and sustainability: “Data center leaders expect approximately 30 percent of all sites to use some form of onsite power as a primary energy source supplemental to the grid by 2030,” notes Naidu.

Debunking common myths

Despite these advantages, outdated perceptions of onsite solutions still remain. Many of these misconceptions stem from a time when fuel cells were still in early development or associated primarily with applications like hydrogen. Concerns around cost, efficiency, safety, and infrastructure have been addressed through technological advancements and real-world deployments.

For instance, “Bloom fuel cells have operated through severe weather events such as heat waves, hurricanes, wildfires, and storms – with highly reliable performance,” says Naidu.

Since the early 2000s, Bloom has continually refined its fuel cell systems, achieving sixth-generation technology that offers four nines (99.99 percent) of availability with minimal excess capacity – achieving a level of reliability that challenges outdated assumptions that onsite power is less dependable than grid power.

While hydrogen-based PEM fuel cells have gained media attention, large-scale commercial installations are increasingly relying on solid oxide technology for its efficiency and fuel flexibility.

The price of fuel cells has fallen significantly and today, initial costs are comparable to traditional combustion systems. Plus, according to Bloom, fuel cells offer greater ROI thanks to higher efficiency – which can be higher by as much as 30 percent.

Additionally, the modular nature of the systems allows operators to start small and expand over time, scaling investment alongside demand. This pay-as-you-grow approach offers vital agility and rapid deployment amidst constant change and pressure to adapt.

A clean future for power

The push for decarbonization is now central to data center strategy and development. Operators are under pressure not just to expand, but to do so sustainably – minimizing their environmental footprint and acting as good stewards to the communities where they operate. This is where fuel cells offer a distinct advantage.

“Bloom has a carbon footprint that is 30 percent lower than other technologies under real operational conditions,” explains Naidu. “We produce virtually zero NOx, SOx, and particulate matter emissions. Plus, our fuel cells use significantly less water compared to other power generation options.”

As rules and regulations around carbon emissions and water usage tighten, fuel cell systems offer operators a way to power up and stay ahead, while maintaining performance, and meeting those decarbonization targets.

Reaching net-zero emissions is a complex but critical goal that requires a coordinated effort across the supply chain. Fuel cells, particularly when integrated with low-carbon fuels like biogas or green hydrogen, can serve as foundational components of that shared strategy.

The key question becomes: How do we power the future, without compromising it? The industry as a whole has a responsibility to meet rising power demands in ways that are scalable, sustainable, and cost-effectively. Onsite fuel cell technology presents a forward-thinking, reliable option for operators navigating this transformation.

Bloom Energy’s approach supports a long-term energy transition by providing dependable, scalable, and environmentally responsible power. In doing so, the company helps operators not only solve for today's power crisis but also keep pace with the demands of tomorrow’s AI-driven landscape.

To learn how Bloom Energy can power your data center with fast, reliable, and sustainable energy, download the mid-year power report.