Bloom Energy vs. Constellation Energy: On-Site Power or Grid Power, Which Wins the Data Center?

Global data center electricity consumption is expected to nearly double to 945 terawatt-hours (TWh) by 2030, while power demand is forecast to increase by 165% by the end of the decade compared to 2023 levels. This surge has put energy providers like Bloom Energy and Constellation Energy in the spotlight. The key question is whether hyperscalers prefer on-site, behind-the-meter power solutions or baseload utility-scale grid power for their data centers.

Bloom Energy's solid-oxide fuel cells provide a significant advantage for technology companies seeking on-site power. The company's delivery of its first fuel cell to Oracle's data center in 55 days, ahead of the 90-day target, has led to a major deal that Constellation Energy has since expanded. Constellation Energy, with its largest nuclear energy fleet in the U.S. and merchant power producer business model, offers long-term power through power purchase agreements (PPAs) with technology companies.

This approach reduces carbon emissions and meets growing electricity demand. Despite its emissions from natural gas, Constellation Energy's nuclear energy fleet and PPA structure make it an attractive long-term play for investors seeking to benefit from the increasing energy demand in data centers.