Ep341: Onsite Power Solutions for Data Centers

Summary

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Currents Ep341: Onsite Power Solutions for Data Centers

Host: Todd Alexander (Norton Rose Fulbright)
Guest: Rebecca McDonald (VP Sales, Data Center Energy Solutions, Bloom Energy)
Date: March 26, 2026

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Episode Overview

In this episode, Todd Alexander interviews Rebecca McDonald of Bloom Energy to explore onsite power solutions for data centers, particularly in the face of surging energy demand fueled by AI workloads and grid constraints. Rebecca provides insight into the evolution of Bloom’s technology, its applications for data centers, reliability, deployment models, and how the market and regulatory landscape have transformed over the past two decades.

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Key Discussion Points and Insights

Bloom Energy’s Evolution and Technology

• Mission Consistency:
  • Rebecca emphasizes Bloom’s enduring mission “to make clean, reliable energy affordable to everyone around the world” [01:09].
• Technology Overview:
  • Bloom offers solid oxide fuel cell solutions, converting natural gas to electricity without combustion, yielding high efficiency, low pollution, and minimal noise [01:13].
  • Efficiency stands at 54% versus competitors’ 35-40% [03:15].

Market Drivers & Data Center Applications

• From ‘Want’ to ‘Need’:
  • The demand for onsite generation has shifted from a luxury to a necessity as grid capacity lags behind data center expansion, particularly with rise in AI workloads [02:26].
• Modular, Scalable Deployment:
  • Bloom’s approach leverages modular, factory-built units that are essentially “plug and play” onsite, speeding up deployment and lowering site risk [03:55, 09:04].
• Reliability Metrics:
  • Bloom systems guarantee 99.9% uptime, with 2 million operating hours logged in off-grid “island mode,” maintaining power through hurricanes and wildfires [05:40].
  • Over 170 microgrids deployed and nearly half a gigawatt currently installed [04:58, 05:09].
• Meeting Capacity Needs Quickly:
  • Scalability allows Bloom to ramp up from its existing 1 GW annual production to 2 GW by 2026 [05:40].

Addressing Grid and Interconnection Challenges

• Filling the Power Gap:
  • “We’re seeing scenarios where we’re pulling a gap and a bridge type for a shorter term capacity and then we’re also having conversations on the longer term.” [07:15]
  • Bloom’s solutions help data centers overcome grid interconnection delays and transmission constraints, offering both short-term and 15+ year options [07:15].

Turnkey Delivery and Long-Term Service

• End-to-End Solution:
  • Bloom acts as both the construction/installation contractor and the long-term operations and maintenance (O&M) provider [08:02, 09:04].
• Performance Guarantees:
  • Rebecca highlights the firm’s commitment:

    “We guarantee whether you’re at year five in the contract or year 10… we’re going to maintain that same level of efficiency…” [08:19]

  • Proactive, remote monitoring allows preemptive maintenance for high uptime [08:19].

Financing & Contracts

• Flexible Commercial Models:
  • “We’ve got financial partnership where we can offer PPA [Power Purchase Agreement]… or you can do a capex agreement...” [09:44]
  • Options include purchasing electrons from Bloom, traditional capital expenditure, or hybrid approaches with bundled O&M [09:44].

Regulatory & Incentive Landscape

• Qualifies for Clean Energy Tax Credits:
  • Systems qualify for a 30% federal investment tax credit post-Inflation Reduction Act (“big beautiful bill” as referenced) [10:24].
• Minimal Permitting Burden:
  • No NOx or SOx emissions mean systems typically do not require air permits, removing a major deployment hurdle [10:24].

Remaining Barriers to Scale

• Supply Chain Optimization:
  • Historically, cost and supply chain were the primary barriers, but advancements have lowered both [11:12].
• Changing Role from Competitor to Complement:
  • Previously, Bloom competed with utilities; now, it complements or fills capacity gaps as utilities can’t keep up with new demand [11:12].

Market Messaging & Value Proposition

• Speed and Strategic Value:
  • Rebecca wishes the market understood not just Bloom’s reliability and speed to market, but also its ability to “help them impact and reduce some of their carbon footprint and their footprint in the data center” [12:26].
  • Recent notable project: Delivered ahead of schedule for Oracle, with an initial timeline of just 90 days [12:26].
• Flexible Solutions:
  • Ability to operate behind or in front of the meter, in grid-tied or islanded mode, supported by creative financing [12:26].

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Notable Quotes & Memorable Moments

• Rebecca McDonald on Mission:

  "Our mission, right, since day one and it continues to be…to make clean, reliable energy affordable to everyone around the world." [01:09]

• On Market Shift:

  "Our customers right now need an alternative. It’s not a Want, it’s a need… we’ve kind of finally met our moment." [02:26]

• On Reliability:

  "We’ve powered already half a gigawatt… nearly 2 million operating hours in off grid island mode, maintaining uptime during hurricanes, wildfires, etc." [05:40]

• On Speed to Market:

  "Most recently we announced the speed to delivery with an Oracle project where we delivered a project ahead of time and our initial timeline was 90 days." [12:26]

• On Market Evolution:

  “Prior to the last couple of years, the utility was always an option. So essentially we’re competing with the utility. Now we’re complementing the utility or filling the gap for the utility.” [11:12]

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Key Timestamps

• 01:09 – Bloom’s mission and technology evolution
• 03:15 – Efficiency gains, modular design
• 04:58 – Deployment volume and reliability statistics
• 07:15 – Bridging grid constraints, customer needs
• 08:19 – O&M, performance guarantees
• 09:44 – Financing and contract options
• 10:24 – Tax credits, permitting advantages
• 11:12 – Barriers to scale and their resolution
• 12:26 – Market education, Oracle case study, strategic benefits

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Conclusion

This episode underscores the urgent need for flexible, reliable onsite power solutions as data center demand outpaces grid growth. Bloom Energy positions itself as a turnkey provider with proven fuel cell technology, robust reliability metrics, and innovative financial and operational models—well-matched to both immediate and long-term market needs.

Transcript

[A]

Foreign. Welcome to Currents and Norton Rose Fulbright podcast. Today we're recording with Rebecca McDonald, VP Sales of Data center Energy Solutions at Bloom Energy. That's a long title you got there. Bloom Energy is a New York stock exchange traded provider of on site energy solutions. And as the data center build out continues to exceed the pace at which the grid's growing, or at least generation's growing, on site generation opportunities seem almost bottomless. Rebecca, thanks for joining us today to discuss on site generation.

[B]

Thanks Todd, it's a, it's a pleasure to be here. Thanks for having me.

[A]

All right, so first maybe you can tell me what Bloom's up to. I remember years ago when fuel cells and that that was going to be, you know, thousands of fuel cells all over. And in fact the people who listen to the podcast know that I was an investor and fuel cells back like 1999. So I was a big fan of fuel cells. Maybe you can tell me what Bloom is, how Bloom has kind of continued to evolve over time and the market's changed a lot since 1999.

[B]

Absolutely, Todd. So you know, there's, there's one thing that hasn't changed, right? And it's our mission, right, since day one and it continues to be and it's to make clean, reliable energy affordable to everyone around the world, right. So that's been the mission from day one. And we've certainly, over the last, I think quarter of a century really have been focusing on really fine tuning our technology. For those who are unfamiliar, just a quick overview on Bloom Energy. So we offer a solid oxide fuel cell technology which takes natural gas without burning it, without combusting it. We extract the chemical energy in it using fuel cell, using a fuel cell to make electricity at the highest efficiency with very little noise, no pollution, and really working to make sure that we're offering a technology that is a sustainable form of electrons for our customers.

[A]

And why is it that we don't have fuel cells all across the country? What's the typical payback for one of these systems and where are they, I guess best suited to deliver power?

[B]

So I think that's one of the areas where we've evolved the most. Right. So over the course of the last 25 years, we've really been, it went from concept to really building out the technology, testing it out, refining it, optimizing supply chain. Right. So up until recently, our customers really were folks who wanted an alternative to the utility. And today what we're finding is our customers right now need an alternative. It's not a Want, it's a need. And so over the course of the past 25 years we've been refining and KR will say we've kind of finally met our moment. This is the moment that Bloom has been designed for. So a few key areas of focus for us is becoming one of the most efficient, reliable technologies out there for our customers. And today we're really hitting that intersection with the current demand that's been driven by the AI requirements and where our technology is in our ability to work with those varying workloads that our AI customers are demanding, offer the efficiency required as we transition to natural gas. Bloom technology is, you know, converts natural gas to electricity, 54, 54% of efficiency, whereas our competitors are at a 35 to 40% efficiency, making sure we're reliable so that we can support these workloads, guaranteeing up to 99.9% uptime with very little overbuilt. Given that the size of our building blocks and then to match to, you know, to match the speed that our customers are looking for. We've really worked over the past decade or so really to refine how we're delivering and building out a modular scalable design where once we come to site, it's, it's almost a plug and play because a lot of the work was being done in the factory and ahead of time. So this is where we're seeing right now, a lot of the momentum that we've seen in the market over the last 12 months.

[A]

So how many megawatts, I don't know how you judge it based on nameplate capacity or whatever you guys use, have been deployed so far?

[B]

We have half a gigawatt already in deployed. We have been running, you know, many of these installs have been up and running for 10, 11 years.

[A]

And so I agree, given all the constraints, you can't find gas turbines. There's all kinds of constraints everywhere. People are trying to find capacity anywhere they can. So it seems like this would be a great time for Bloem to. So what in terms of what you're offering Data center, it sounds like you, what's the time to market? And your reliability, you already mentioned is your availability. When you say reliability is that Your uptime is 99.9% our uptime.

[B]

So yeah, so just to put it into a bit of context, as I mentioned, we've powered already half a gigawatt. We've logged nearly 2 million operating hours in off grid island mode, maintaining uptime during hurricanes, wildfires, etc. And also have over 170 microgrids deployed since 2011. Right. So from the reliability you know our technology has demonstrated we're capable right now. Also from scalability we have more the ability right now we've scaled up to a gigawatt of capacity in our, in our factory and we're on on plan to scale up to 2 gigawatts by the end of 2020 26.

[A]

That's your annual production.

[B]

And as the market demands the way we've built our structure is we can easily scale up. So our, you know we've done a phenomenal job of making sure that we're ready for this moment.

[A]

I assume also but lets you confirm that given the way what I understand about the modular nature of the fuel cell and how it can be cited that this can also be something that can be used for anybody who's got load including a data center where you've got either transmission constraints or interconnection delays as a way to either self power or get behind those constraints.

[B]

Absolutely. So right now we're seeing scenarios we are where we're pulling a gap and a bridge type for a shorter term capacity and then we're also having conversations on the longer term. Right. The it's going to take, you know, it's going to take over a decade before the grid is really built to where it can sustain or even longer. So we've got customers who are really looking at that. They're, you know, they're getting varying responses from, from the utility. You know, one minute it's, it's 12 months, the next it's you know, 36 months, etc. So we're having conversations today on shorter term gap requirements where you know, we're offering bridge power and then longer term solutions from 15 plus years.

[A]

And is Bloom both the construction contractor and the long term service provider or how does it work if somebody has a need for fuel cell, how does the contract member they have to bring their own contractor. How do you, how do you get the point?

[B]

That's a great question. So we run and maintain our servers with a promised guarantee of performance by ensuring consistency and efficiency. So that's something that's a key differentiator from others in the market. We guarantee whether you're at year five in the contract or year 10 in the contract that we're going to maintain that same level of efficiency where we're servicing it. We have the ability to proactively monitor and are often out and explain and making infield replacements before there's even an impact or the end User is even aware. And that's proven in the history of the half dawat that we've already got installed today.

[A]

And how about the installation in the first place, is that also done by Bloom?

[B]

It is, it is. As I mentioned, a lot of the work we've done in our plant. Right. So we're modular. You know, we're delivered on spin. A lot of the work. And this is the direction we're seeing a lot of, you know, the folks go to speed up deployment is whatever can be done in the factory minimizes the time and the risk on the delivery and execution side. And that. And that's our model.

[A]

And how about the financing to deploy it? Does the hosts also pay for the facility upfront and arrange their own financing? Are you basically getting vendor financing or how do you, how do they pay for it?

[B]

Yeah, so, Todd, we, we offer flexibility. So we've got, we've got financial partnership where we can offer ppa. We can, you know, service ingest. They can purchase electrons from us. Or you can do a capex agreement, which is often partnered with a management agreement. So a maintenance, I'm sorry, agreement where we are all of the maintenance for them.

[A]

Okay. And what, in terms of tax incentives and other clean energy programs, does the technology qualify for? So if I were to buy the system, can I qualify for an investment tax credit?

[B]

Absolutely. So we thankfully have made our way back into the big beautiful bill, so we're able to offer and fall under the 30% tax credit. The other big advantage is the fact that we have no knocks, no stocks to make air permitting, which is typically a long pole in the tent when it comes to speed to delivery and getting projects up and running. So we typically fall under the threshold requiring air permits. So that's a huge advantage in, you know, our speed to market that we can offer to our customers.

[A]

So what historically then has been the biggest barrier to you. Instead of having 500 megawatts, having 5,000 megawatts deployed.

[B]

So there's a few things, Todd. They're optimizing the supply chain. Right. So over the course of the last decade or so, there's been a tremendous amount of work in optimizing our supply chain, bringing the cost down. There also is the need, Right. The demand. Prior to the last couple of years, the utility was always an option. So essentially we're competing with the utility. Now we're complementing the utility or filling the gap for the utility. So it's, you know, it's a, it's a couple of things I'd Say we've optimized supply chain. Our technology has continued to get better. Right. Our load following capabilities, some of the testing that we've done, we've been able to prove that we can support, support this AI growth in this market. So it's a few things. Cost gaps we're filling for the utility and then also our technology impairments.

[A]

All right, so last question for you. If there's something you wish that the market understood about your product, since you're on the sales side, what is it that you wish people you could get them to understand which would make your job a lot easier?

[B]

Yeah. So I think, Todd, the market is really starting. They're really seeing the value of our technology. We're seeing that in a lot of the partnerships that we've already announced. Most recently we announced the speed to delivery with an Oracle project where we delivered a project ahead of time and our initial timeline was 90 days. We've been able to collaborate and offer flexible programs right behind the meter, from the meter, collaboration with the utility grid tide islanded. We have creative financing options. And then not only are we here to help them meet a gap in power, but there's also a lot more to our discussion. What more strategic, strategic longer term discussions we can have on how we can really help them impact and reduce some of their carbon footprint and their footprint in the data center.

[A]

As we all know, we need as many sources of new capacity as we can and especially something that can come online quickly. And it sounds like you guys are well positioned to do that. So good luck and I hope you ramp up a lot more than 2,000 megawatts per year. We need it.

[B]

We will. You'll definitely see some exciting, exciting announcements. So we look forward to it. Thank you for the time. Thanks for having me.

[A]

Thank you. You can find us online at www.projectfinance.law or send us an email at currentsortonrosefullbright.com Please rate, review and subscribe on Apple Podcasts, Spotify or your preferred podcast app. Our show today was produced by Emily Rogers. Stay ahead of the Currents.