AT&T has made a deal with Silicon Valley-based Bloom Energy to install 7.5MW of Bloom’s fuel cells across 11 AT&T sites in California, including some of its data centers.

"AT&T will be deploying Bloom Energy fuel cells in California at AT&T administration offices, data centers and facilities that house network equipment," an AT&T spokesman wrote in an email.

The product is called Bloom Energy Servers, which use solid oxide fuel cells to convert air and natural gas into electricity through an electrochemical process. According to AT&T, the technology reduces carbon-oxide emissions when compared to those associated with taking energy from the electrical grid by as much as 50%.

The boxes are expected to produce more than 62m kWh of energy a year. Installation will begin later this year and the Energy Servers are expected to be fully operational by mid 2012.

The use of natural-gas or hydrogen fuel cells in data centers is uncommon. The few known examples include a Fujitsu data center in Sunnyvale, California, the First National Bank’s data center in Omaha, Nebraska, and a Verizon data center on Long Island in New York State, all three of which use hydrogen fuel cells.

Bloom Energy launched its product in February 2010, saying it would start with large-capacity deployments for enterprise customers and gradually introducing consumer-level fuel cells.

Click here to see a video report on Bloom Energy’s unveiling of the product