AT&T became Bloom Energy's largest corporate customer Tuesday when it announced plans to more than double its existing contract with the Sunnyvale-based fuel cell startup.
Last year, AT&T signed an initial contract with Bloom for 7.5 megawatts. On Tuesday, the telecommunications giant added an additional 9.6 megawatts.
Bloom Energy's fuel cells will power 28 AT&T facilities in California and Connecticut, including two facilities in San Jose. AT&T is not buying Bloom's technology outright; it is buying the electricity Bloom produces through long-term contracts known as power purchase agreements. The cost of the PPA's was not disclosed.
The total size of the agreement, for 17.1 megawatts, makes AT&T Bloom's largest nonutility fuel cell customer.
"We have high-tech centers that run around the clock, and the Bloom Boxes have worked perfectly," John Schinter, AT&T's director of energy, said in an interview. "We haven't had any outages, and this allows us to have on-site generation with high reliability."
Fuel cells use hydrogen, natural gas, methane or other fuels to generate electricity through an electrochemical process that produces fewer emissions than a typical coal-fired power plant. Unlike wind turbines or solar panels, fuel cells operate 24 hours a day, providing what's known as "baseload" power. That's made them increasingly attractive to companies with intense data center needs, like
Each Bloom Energy Server, commonly known as "Bloom Boxes," provides 200kW of power, which the company says is enough to meet the baseload needs of 160 average homes or an office building. Within each device are thousands of fuel cells that are sandwiched into stacks. For more power, customers add more energy servers.
When fueled with biogas, Bloom says its Energy Servers are a carbon-neutral source of electricity. When using natural gas, it releases 773 pounds of carbon dioxide per megawatt/hour, compared with the 2,249 pounds produced by coal-fired plants.
A significant fraction of Bloom's installations run on natural gas. And while natural gas is not a renewable resource, some in the energy industry consider it the "blue bridge to a green future" because it emits fewer greenhouse gases than coal.
"The abundance and long-term availability of domestic fuel like natural gas is pretty reassuring for the industry," Bloom CEO K.R. Sridhar said in an interview. "You can't go from 100 percent carbon to 0 percent carbon overnight. Natural gas is a fantastic bridge."
Bloom has raised more than $800 million from venture capitalists and hopes to have its Delaware factory up and running by fall 2013. Delmarva Power, the local utility in Delaware, plans to purchase 30 megawatts of fuel cells.
But Bloom's Delaware deal is facing legal scrutiny. A rival company, Connecticut-based FuelCell Energy, has filed suit in federal court, arguing that Delaware government officials discriminated against competitors and unfairly tweaked state legislation to allow Delmarva Power to count Bloom's natural gas-based fuel cells toward its renewable portfolio standard. The lawsuit accuses Delaware of allowing the utility to raise rates on customers to subsidize Bloom.
Bloom often claims that its fuel cell technology reduces carbon emissions by approximately 50 percent compared with the nation's existing electric grid. But in California, the electric grid is growing greener by the day because utilities are under orders to get 33 percent of their electricity from renewable sources by 2020.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.