The Premium Power Play: Data Centers & Hydrogen

Key Points

Global data center demand for electricity is rising across all sources, and grid constraints favor more on-site power generation – though faced with significant challenges, hydrogen fuel cells could play a role in this market.
Technology companies were the top clean energy buyers in 2024, and we discuss their ability to pay a premium to most large-scale power consumers, focusing much more on reliability than affordability per our findings.
The ability of data centers to pay a premium price due to their ability to pass it forward suggests that this is an area where hydrogen fuel cell demand could rise as they focus more on on-site generation and sustainability.
With incentive policy uncertainty and the cost of low-carbon hydrogen production limiting many growth paths, downstream demand channels with the ability to pay a premium price become increasingly important.
Otherwise, we highlight movements in ammonia and methanol markets, planned nuclear power curtailments in Europe, and our hydrogen cost estimates. We also flag news relevant to hydrogen and associated markets.

Exhibit 1: Technology leads global clean power PPAs; is a scramble for energy or sustainability fueling this ambition?