Start a new document any size you want.

Create a new layer, and fill it with a Linear gradient of dark blue to lighter blue.

Darker blue: #395D9E
Lighter blue: #6A9BC9

-Create a new layer.

- Press D to reset your color pallete

- Go to Filter->Render->Clouds.

- Then Filter->Render->Difference Clouds.

- Press CTRL+F twice.
- Set the clouds layer blending mode to: Screen

Reduce to Opacity of the original cloud layer to 70%, and the extrude layer to 50%

Now select the extruded cloud layer and apply a gaussian blur with 5.0 px setting. (Filter->Blur-Gaussian Blur)

Now I will show you how to use it in an image.

I got this image below which I removed the sky in the background.

Now this image, I create the clouds and put it behind the mountain, but it looks rather fake because its too flat.

Now we need to distort the clouds a little, so link the extruded clouds layer and the original clouds layer together

Then go to Image->Transform->Skew.

and drag the top left and right handle up and outward.

This now give us a more realistic sky.

DOWNLOAD PSD FILE