Key facts
- AI data centers are increasingly installing on-site fuel cells to bypass congested electricity grids.
- Rystad Energy projects fuel cell market revenues to grow from $2.8 billion in 2025 to $30 billion by 2030.
- Grid interconnection timelines for large data centers have tripled since 2015.
- Solid oxide fuel cells (SOFC) are the dominant technology for data center power.
- Scandium, a critical mineral for SOFCs, faces supply chain risks due to Chinese market control.
AI data centers are increasingly turning to on-site fuel cells as a solution for reliable power, bypassing congested and delayed electricity grid connections. Research from Rystad Energy indicates a significant market expansion, with fuel cell revenues projected to grow from approximately $2.8 billion in 2025 to around $30 billion by 2030, driven by the surge in AI computing demand and subsequent data center construction.
US grid interconnection timelines have extended to three to six years, prompting data center operators to seek alternative power sources. Rystad Energy estimates a cumulative demand of 10.4 GW for fuel cells from data centers between 2026 and 2030, with nearly half of projected US data center capacity likely to opt for dedicated on-site generation. Fuel cells offer quicker deployment and lower on-site emissions compared to traditional combustion alternatives, with the flexibility to transition to cleaner fuels like biogas or hydrogen.
North America is anticipated to lead global on-site power generation capacity, accounting for 91%, due to grid delays, federal tax incentives, and an established domestic supply chain. Power availability has become a critical constraint on data center growth, elevating fuel cells from a niche application to a significant component of firm power solutions.
Fuel cell manufacturers are responding by expanding production capacity, with plans to reach 4 GW per year by 2030, up from 1.8 GW currently. Solid oxide fuel cells (SOFC) have emerged as the leading technology for continuous data center power, representing about 53% of stationary deliveries. However, Bloom Energy, a major SOFC contractor, holds a concentrated position in the order book, posing a potential supply chain risk.
Material supply is another concern, particularly for scandium, a critical metal used in Bloom Energy's SOFC electrolyte. The company's planned expansion could require scandium volumes approaching the entire current global market, which is heavily controlled by China. Competitors using different technologies do not face this specific exposure, and sustained supply constraints could impact market share development as the sector scales. Despite these challenges, Rystad Energy projects SOFC system costs to decrease by 20 to 25% by 2030.