FuelCell Energy (FCEL) jumped 16% on Wednesday after the company announced a strategic partnership with Fit Energy USA LP to supply up to 380 megawatts of clean power to data centres using fuel cell technology.
The stock was trading up on the news, with investors responding to the scale of the potential deal and FuelCell Energy’s growing exposure to AI infrastructure demand.
Under the agreement, Fit Energy has paid an immediate deposit tied to an initial 30 MW power deployment, which is expected to come online later this year. The broader framework allows for expansion up to 380 MW as additional projects develop.
Fit Energy will also be eligible to receive warrants linked to future deployment milestones tied to the larger rollout. The warrant structure is designed to align both companies around long-term project execution rather than short-term commitments.
Jason Few, President and CEO of FuelCell Energy, said the deal validates the company’s decision to scale production capacity to 500 MW.
“This agreement further validates our decision to scale our operations to 500 MW, preserving our ability to serve a broad and growing pipeline of customers,” Few said.
FuelCell Energy focuses on utility-scale clean energy. Fit Energy is focused on power infrastructure for data centres, advanced computing, and AI workloads.
The deal puts FuelCell Energy squarely in the path of a fast-growing need. Data centre operators are hunting for reliable, large-scale power as AI adoption pushes electricity demand higher.
Joel Leonoff, CEO of Fit Energy, described the partnership as a foundation for next-generation AI infrastructure.
“FuelCell Energy’s technology aligns with our growth objectives and our goal of delivering behind-the-meter power solutions to data centers at gigawatt scale,” Leonoff said.
Behind-the-meter power means the energy is generated and consumed on-site, bypassing the traditional grid connection. It’s a model that data centre operators find attractive for reliability and speed of deployment.
The warrant structure ties Fit Energy’s additional upside directly to how much power actually gets deployed. That keeps both sides focused on delivery rather than just signing agreements.
Canaccord Genuity acted as financial adviser to FuelCell Energy on certain aspects of the transaction.
The initial 30 MW phase gives the partnership a concrete near-term milestone to hit before the broader 380 MW framework kicks in.
FuelCell Energy said the deal reinforces its strategy to expand production capacity to meet anticipated demand from customers in the AI and data centre space.
The company’s 500 MW scale-up target, referenced by CEO Few, is now directly connected to a live customer agreement with an initial deployment expected before year-end.
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