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Growing data center demand from customers surrounding a major U.S. grid system has created a wave of unique energy deals in the last few months.

Why it matters: The deals come as PJM, the nation's largest grid operator, faces scrutiny for rising capacity prices and a backlog of clean energy projects.

Driving the news: On Friday, fuel cell maker Bloom Energy said that power company AEP planned to buy up to 1 GW worth of fuel cells for its data center customers.

AEP's executive vice president and chief commercial officer, Greg Hall, told Axios the company is "seeing the most demand right now in the PJM system, particularly in Ohio and Indiana."

Zoom out: PJM is also the grid where Amazon Web Services announced plans to acquire a data center campus at a nuclear power station in Pennsylvania (the application for the interconnection agreement was later rejected by FERC).

It's also the grid where Microsoft is working with Constellation Energy to restart the shuttered nuclear plant at Three Mile Island in Pennsylvania.

That region is made up of mostly natural gas and nuclear assets, with declining coal power. It's got a major backlog of clean energy and storage projects that are crawling forward.

There are big data center clusters around PJM grids in Virginia, Washington, D.C., Ohio and Indiana. AWS is investing $11 billion in building new data centers in Indiana, the largest investment in the state's history.

The big picture: The combo of new data center projects and a clean energy backlog means companies trying to get electricity from utilities have to get creative.

PJM has seen prices in its latest energy capacity auction hit record highs, raising concerns that utility customers in the region could see higher bills.

Five governors of states in the PJM system told the grid operator last month to change its strategies so that utility customers wouldn't bear the burden of the demand surge from large users.

What's next: PJM's next capacity auction has been delayed until next summer so it can develop new market rules.

Bottom line: Expect to continue to see AI data center customers desperate for power in the PJM region keep spurring some of these more unusual deals.

Data center surge leading to creative energy deals

Bloom Energy is selling fuel cells to AEP, which will use the tech in PJM.

Bloom Energy fuel cells installed at a site.

Bloom Energy fuel cells installed to provide distributed power. Photo: Courtesy of Bloom Energy

Electric grid

Growing data center demand from customers surrounding a major U.S. grid system has created a wave of unique energy deals in the last few months.Why it matters: The deals come as PJM, the nation&#x27;s largest grid operator, faces scrutiny for rising capacity prices and a backlog of clean energy projects.

Data center surge leading to creative energy deals

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