AT&T doubles down on Bloom Energy fuel cells

AT&T (s T) is now Silicon Valley fuel cell maker Bloom Energy’s largest customer that’s not a utility, according to San Jose Mercury reporter Dana Hull. Hull reports that AT&T more than doubled the size of its deal to buy power from Bloom Energy fuel cells to 17.1 MW.

Bloom makes fuel cells that take fuel (natural gas or biogas) and combine it with oxygen and other chemicals to create an electrochemical reaction that produces electricity. Bloom Energy servers can deliver distributed power on site at a building, and this can have a lower carbon footprint and potentially more electrical reliability than grid power.

AT&T will use the fuel cells to power its operations in California and Connecticut, and AT&T is buying the power from the fuel cells, not buying the fuel cells themselves. Back in January of 2011, Bloom Energy launched its energy-as-a-service product, enabling customers to sign 10-year deals to buy the power from the fuel cells without having to pay the high upfront costs of buying the systems.

AT&T first announced its deal with Bloom back in the Summer of 2011. AT&T told me that it would use the fuel cells to power not just administration offices, but also data centers and facilities that house network equipment. Bloom Energy has begun to bring in a good number of data center customers including Apple (s AAPL), and eBay (s EBAY) (and maybe Microsoft, too), and the company launched a data center focus to appeal to these Internet companies.

Ten-year-old Bloom is a prime example of a really capital-intensive cleantech company: it could potentially be a game changer for distributed cleaner power generation, but it has needed lots of capital to scale up manufacturing. If Bloom closes this recently reported round of $150 million, it will have raised at least $800 million over its lifetime. Bloom CFO Bill Kurtz told me earlier this year that Bloom is about “halfway” to breaking even and becoming profitable.

While AT&T is now Bloom Energy’s largest corporate deal, Delaware utility, Delmarva Power & Light, is Bloom’s official largest customer. Delmarva Power & Light has about 500,000 electricity customers and plans to buy 30 MW worth of fuel cells from Bloom.