Shares of Bloom Energy (NYSE:BE) climbed 10% on Thursday after American Electric Power (NASDAQ:AEP) disclosed a $2.65 billion agreement to buy solid oxide fuel cells from the company.
In a regulatory filing, AEP said its unregulated subsidiary has entered into an unconditional purchase agreement covering “a substantial portion” of the option it previously announced for Bloom Energy’s solid oxide fuel cell systems. The utility plans to use the equipment to develop a fuel cell power generation facility near Cheyenne, Wyoming.
The transaction significantly deepens the partnership between the two companies. Back in November 2024, AEP agreed to purchase 100 megawatts of Bloom Energy fuel cells and secured an option to acquire up to an additional 900 megawatts. The newly announced deal represents a major step toward exercising that broader option.
Alongside the equipment purchase, AEP also revealed that it has lined up a 20-year offtake agreement with an unnamed “high investment grade third party customer” for all of the electricity produced by the planned Wyoming facility. The arrangement remains subject to certain conditions, which AEP expects to be met by the second quarter of 2026.
The utility added that if those conditions are not satisfied, it “will be financially compensated for all capital and costs incurred.” The scale of the order underscores strong confidence in Bloom Energy’s technology, which produces electricity through an electrochemical process rather than traditional combustion.