American Electric Power signs $2.65 billion deal for fuel cells

Jan 8 (Reuters) - American Electric Power AEP.O said on Thursday its unit will buy a substantial portion of its option for solid oxide fuel cells in a deal worth about $2.65 billion as part of its plans to develop and build a fuel cell power generation facility.

In 2024, AEP had signed an agreement with Bloom Energy BE.N to acquire 100 megawatts of solid oxide fuel cells with an option to purchase an additional 900 MWs. The utility's unit exercised that option earlier this week, AEP revealed in a regulatory filing.

Shares of Bloom Energy surged 14% to $123.04, its highest since November, in early trading.

AEP also signed a 20-year deal with an unnamed customer to supply the entire output from the fuel cell generation facility that will be located near Cheyenne, Wyoming.

The offtake deal is subject to certain conditions which are expected to be satisfied by the second quarter of 2026, the utility said. If the conditions are not met, AEP will be financially compensated for all capital and costs incurred, it added.