Diversified Energy Company Plc (NYSE: DEC, LON:DEC), FuelCell Energy, Inc. (NASDAQ: FCEL) ), and TESIAC have announced a strategic partnership intended to address the urgent energy needs of data centers by supplying as much as 360 megawatts of electricity to three distinct locations in Virginia, West Virginia and Kentucky.
The partnership has agreed to create an Acquisition and Development Company focused on delivering reliable, cost efficient, net-zero power from natural gas and captured coal mine methane to meet the soaring demand of data centers for reliable power.
The collaboration among the three companies would leverage in-basin natural gas production, advanced energy generation via fuel cell technology, and infrastructure financing to create a highly efficient, scalable, and sustainable energy solution tailored for the rapid expansion of data center power capacity requirements.
Natural gas or CMM, extracted from coal mines by Diversified Energy and delivered via pipeline to fuel cells, would generate power through the electrochemical conversion of methane to hydrogen, and then to electricity. This combustion-free process is virtually free of air pollution emissions, speeding air permitting and enabling the system to be brought online faster than combustion-based systems. Heat that is co-generated by the fuel cells can be harnessed and converted to chilling for the data center, thus increasing overall system efficiency and further enhancing economic value. Importantly, this process qualifies for established environmental and tax credits that have the potential to provide meaningful cash flow in addition to the economic benefits of gas and power sales.
The parties are structuring the terms of the agreement to include:
- Diversified Energy supplying natural gas and CMM or captured waste methane from coal mines that otherwise would have been vented into the atmosphere, from its Appalachian Basin production as the base fuel.
- FuelCell Energy deploying its fuel cell energy platforms, delivering distributed, high-efficiency baseload power generation, emissions management, and thermal energy solutions. This includes electricity and waste heat driven absorption chilling, ensuring data centers achieve unmatched efficiency, carbon reduction, and resilience.
- TESIAC leveraging its investment and development expertise, securing highly competitive financing options to accelerate deployment while maintaining long-term profitability and scalability.
This unique partnership intends to create a decentralized, high-performance, and sustainable energy solution to meet the demands of data centers that enable rapidly growing AI and high-performance graphics processing units. The partnership initiative, using U.S.-made technology and materials, could create hundreds of well-paying jobs in construction, operation, maintenance, and assembly and engineering, as well as indirect economic benefits, all while driving a new era of innovation in the data center industry, alongside other high-volume electric off-take markets.
Other key attributes include:
- Behind-the-Meter Solutions: Rather than rely on grid-based power, this model is expected to be designed to provide on-site, continuous, and scalable power generation, securing data center uptime even in volatile market conditions with optionality to sell into the grid.
- Disruptive Financing Model: Innovative capital structuring will target faster deployment and stronger financial resilience compared to traditional investment structures.
- Carbon-Optimized Power Generation: The integration of captured methane, distributed fuel cells and emissions capture ready technology to reduce a customer’ s carbon footprint, setting a new industry standard.
Brad Gray, President and Chief Financial Officer of Diversified Energy, said: “Our natural gas and coal mine methane asset footprint is advantageously positioned in the Appalachian Region to support the power generation needs of data centers directly. The market demand for the type of reliable, quickly dispatchable power that only natural gas can deliver is incredibly strong, and we’re excited about the potential of this partnership to deploy Diversified Energy-produced natural gas and coal mine methane (CMM) and pair it with Fuel Cell’s advanced industrial-scale technology to create an efficient, cost-effective, environmentally sound solution for the next generation power needs of data centers.”
Jason Few, President and CEO of FuelCell Energy, stated: “We’re excited by the opportunity to partner with the Diversified Energy and TESIAC teams, merging their resources with our electrochemical technology to deliver a scalable, distributed baseload power solution. We believe the future of AI and other high-performance computing will require an abundant supply of clean, reliable, and locally generated power, ensuring that data centers can operate with maximum efficiency and sustainability. By leveraging an abundant supply of natural gas and coal mine methane (CMM), we’re confident we can address data center energy needs more quickly and cleanly than other market alternatives, accelerating the time to revenue for data centers and their customers.”
Karen Morgan, Managing Partner at TESIAC, said: “We anticipate there will be multiple benefits for communities from this collaboration. Stabilizing the energy supply, while capturing methane emissions, turns an environmental challenge into an economic growth opportunity, creating steady job growth as a result of bringing the supply chain closer to the source of power and the end user. By combining our expertise with Diversified Energy and FuelCell Energy, we are creating a model for the future of data centers, one that is strategic, sustainable and built for long-term growth.”
The companies look forward to sharing further information about the partnership, specific projects, and development timelines soon.
