Data centers need dispatchable power — and no matter how many clean options hit the market, fossil fuel-powered generators remain in huge demand. In just five years, diesel generator capacity at data centers nearly tripled, going from 20 gigawatts in 2018 to 55 GW in 2024, according to a new report by the Better Data Center Project, a policy organization focused on minimizing the environmental costs of rapid data center expansion.
In Virginia — the largest data center market globally, believed to host more than a third of all hyperscale data centers worldwide — there were over 10,500 generator units permitted for data centers by the end of 2025, with a total capacity of 27 GW. That’s equivalent to the power usage of roughly 20 million U.S. households, in a state with less than 4 million homes. Oregon, which has a rapidly growing data center market, has six GW of permitted and proposed diesel generators, double the combined average yearly power consumption of homes in the state.
Diesel generators are ubiquitous as backup power for data centers both for their reliability and because the high energy density of diesel means that they can run for up to 96 hours using fuel stored on-site.
And because they’ve been around for a long time, they’re easy to procure, install, and fix. This has been a barrier to battery companies like Moxion, which went bankrupt in 2024 after its unsuccessful attempt to go after the portable generator market. The company that purchased Moxion’s assets, Viridi, is instead targeting more fixed applications — including commercial buildings like data centers — and building out technology surrounding the battery that keeps it from causing a fire.
However, at the moment, generators typically have lower capital costs than batteries, running at around than $1,000 per kilowatt, whereas a four-hour battery storage system comes in at around $1,300 per kilowatt, according to June 2025 estimates by the National Renewable Energy Laboratory. That said, energy storage costs are decreasing quickly, and fuel and maintenance costs make diesel generators more expensive in the long run.
For all these reasons, the vast majority of data centers so far have come equipped with diesel generators, with large sites usually having hundreds of them, in sizes ranging from two to four megawatts; an Amazon data center in Manassas, Virginia, for example, has 93 generators, each 2.5 MW in size.
While some companies position their generator use as only for emergencies like extended grid outages, the Better Data Center Project notes that operators have been increasingly relying on them. This is ostensibly because of the industry’s prioritization of speed to power over lower emissions.
For example, a data center will occasionally switch to diesel capacity to avoid minor grid disturbances, such as changes in voltage or frequency, which last seconds — but can lead to the data center remaining on generator power for hours. Or else they may use diesel generation to participate in demand response and other flexibility initiatives, which are becoming more popular as a way to avoid overstressing the grid. This occurred as recently as June 2025 in Virginia during a heatwave, when Tier 2 diesel generators were used for participation in demand response, according to the report.
Diesel generators are the main source of data center air pollution after on-site primary power generation, such as the dedicated gas generation.
According to the EPA emissions classification, generators used by data centers either belong to Tier 2 emission tier or Tier 4. The former are compliant with older EPA emissions standards, while the latter comply with today’s standards. Tier 2 generators rely primarily on internal engine design to manage pollution and lack filters to catch pollutants such as soot, and release roughly nine times more nitrogen oxides, and have particulate matter emissions that are about 85% higher than their Tier 4 counterparts.
In Virginia, over 70% of the 27 GW in diesel generator capacity is Tier 2 — but over half of the newly permitted capacity is Tier 4 standards. On average, even modern diesel generators produce up to 0.9 kilograms of carbon dioxide per kilowatt hour, which is significantly higher than both gas alone and the standard utility mix, which usually includes a mix of gas, coal, and clean energy.
