Data centers and AI infrastructure are driving electricity demand to levels the grid was never designed to handle. Utilities and large energy users are now under pressure to find a better way forward—one that doesn't stick ratepayers with the bill for grid upgrades. Bring Your Own Power (BYOP), also referred to as Bring Your Own Generation (BYOG), is increasingly emerging not as a replacement for utility service, but as a collaborative model in which customer-funded generation helps utilities connect large loads faster and more cost-effectively.
With BYOP, large energy users supplement utility service with customer-funded onsite or near-site generation that is coordinated alongside utility infrastructure planning. These systems can provide bridge power while grid capacity is developed, reduce strain on transmission infrastructure, or operate as part of a broader hybrid supply strategy.
Not all BYOP generation is created equal. For example, deploying polluting diesel generators to solve capacity issues can cause local community backlash, exchanging one crisis for another. BYOP technology must deliver reliability, efficiency, low emissions and good water stewardship—all attributes exemplified by fuel cells.
Data centers and legislators are embracing BYOP
BYOP is gaining traction in the data center industry. Google, Oracle, xAI, Meta, Microsoft, OpenAI, and Amazon recently signed the Ratepayer Protection Pledge. In it, these large data center operators, or “hyperscalers,” have committed to build or acquire their own generation, fund needed infrastructure upgrades, and work with utilities and grid operators to protect reliability and keep costs in check for everyone. The pledge is non-binding, but it shows the tech industry wants to be a good neighbor.
Rare bipartisan support is also fueling momentum for BYOP adoption. Legislative initiatives, such as the GRID Act spearheaded by Sens. Josh Hawley (R-Mo.) and Richard Blumenthal (D-Conn.), are driving large-load customers towards BYOP solutions.
There are several legislative proposals in the works, however, it is the states, not the federal government, that largely set retail electricity rates. This limits the impact of federal rate protection plans.
The Federal Energy Regulatory Commission (FERC) could clarify state and federal roles by introducing a rule on large load interconnections.
How utilities and hyperscalers can co-develop capacity
BYOP is increasingly evolving into a collaborative utility-customer model for serving large load growth. Rather than replacing utility service, customer-funded generation can complement utility infrastructure by accelerating time-to-power, reducing pressure on transmission expansion and helping utilities avoid shifting large infrastructure costs onto existing ratepayers.
“Data centers have long relied on the grid for their power,” Rebecca McDonald, vice president of sales, Data Center Energy Solutions for Bloom Energy, said. “It’s a known entity.”
But utility infrastructure timelines often do not align with the speed at which hyperscalers need capacity online. BYOP allows large loads to be phased in more quickly while transmission and generation infrastructure is developed in parallel.
Fuel cells are a leading BYOP technology because they meet the core requirements of hyperscale load: speed, reliability, efficiency, and emissions performance.
Unlike diesel generators or gas turbines, fuel cells don’t burn fuel. Instead, they use fuel, such as natural gas, to generate electricity through an electrochemical process, making them significantly more efficient than conventional generation—typically 35% to 45% more efficient. They also produce near-zero NOx, SO₂ and particulate emissions. And they operate quietly and do not require water during normal operation. This improves location flexibility and reduces community impact. As a result, they often benefit from simpler permitting requirements compared to traditional generation.
Fuel cells are also built for demanding load environments. They can support large, dynamic data center demand with high reliability and in a very small footprint, making them well-suited for hyperscale applications where uptime is critical. And because they are modular, they can be upgraded or relocated as system conditions and customer needs evolve, giving utilities more flexibility in long-term planning than traditional centralized assets. Add something about smaller land footprint.
Speed to power is a critical factor for data centers. Fuel cells can be deployed in months, not years. They generate power at or near the load, reducing the need for major transmission and distribution upgrades.
Most modern fuel cells systems use natural gas from highly reliable underground pipeline networks. They can also transition to biogas, hydrogen or blends as those options become more available and cost-effective—helping future-proof long-term energy investments.
Upfront investment in fuel cells can be higher, but they are cost-competitive and have lower total ownership costs over them when compared to dispatchable generation technologies, such as combustion-based generators or turbines. “Looking at the levelized cost of energy, fuel cells are usually below grid parity,” said Carsten Schrick, VP of Sales for Bloom Energy.
How utilities can support BYOP
Utilities are recognizing BYOP’s value as a new asset class—distributed, customer-sited generation that can be integrated into system planning alongside traditional resources. By collaborating directly with large energy users, utilities can help coordinate clean, reliable power solutions — without triggering major infrastructure expansion. For example, AEP Ohio has partnered with Bloom Energy to deploy fuel cell systems to meet the immediate power needs of two large data centers in Central Ohio.
BYOP assets can also support broader system needs. When connected to the grid, they can improve capacity availability during tight conditions, add operational flexibility and help manage system constraints more dynamically.
Turning BYOP into a reliable power strategy
Fuel cells help balance rising demand with reliability, lower costs and reduced emissions for utilities and large energy users.
Bloom Energy has been a leader in fuel cell power generation for 25 years, with more than 1.8 GW of installed capacity. Its Solid Oxide Fuel Cell Energy Server® systems can be deployed in front of or behind the meter, offering flexible configurations and contracting models to meet a range of customer and utility needs.
With a modular architecture designed for rapid, scalable deployment and high reliability, Bloom Energy’s fuel cells are increasingly being used to support large, dynamic loads where speed and certainty of power delivery are critical.
To learn more about how fuel cells can support BYOP strategies, contact Bloom Energy.
