(Bloomberg) -- Bloom Energy Corp. shares soared the most ever in intraday trading Friday after American Electric Power Co. said it would use the company’s fuel cells to supply data centers.

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AEP said in a release Thursday that the Bloom fuel cells would provide a quick solution to add power as the utility industry struggles to meet rising electricity demand. Bloom shares were up 49% to $19.74 at 10:13 a.m. in New York, after initially surging as much as 69%.

“This is a significant win for Bloom as it opens the way for additional large, utility-level agreements,” analysts from Susquehanna Financial Group said in a note Friday. “This order provides a proof point for Bloom’s fuel cells as a viable option for powering data centers, particularly as the grid remains power constrained while load growth demand accelerates.”

AEP has agreed to use up to 1 gigawatt of Bloom’s fuel cells, which generate power through an electrochemical reaction rather than combustion. Fuel cells can be installed far faster than upgrades to the electric grid, giving AEP a new way to supply artificial intelligence data centers that require as much power as entire towns.

After decades of stagnant growth, utilities are facing a surge in electricity demand from data centers, new factories and electric cars. But building new power plants and upgrading the electric grid takes years, leaving utilities few good options for addressing short-term growth.

“These fuel cells will help provide data centers and other large customers with the power they need to quickly expand in our regulated footprint as we continue to build infrastructure to deliver reliable energy,” said Bill Fehrman, AEP’s chief executive officer, in a statement Thursday.

Agreements are now being finalized with the first customers, who will cover all the costs of the projects, according to AEP. Financial terms of the deal with Bloom Energy weren’t disclosed.

Although Bloom’s fuel cells run on natural gas, they can switch to hydrogen if that fuel becomes more broadly available and affordable. When running on hydrogen, they produce no greenhouse gas emissions, giving data center operators a way to meet their climate goals.

--With assistance from Janet Freund.

(Story updates with shares and analyst commentary throughout)