Data Center Expansion Increases Demand for Diesel Fuel

by Donna Harris (OPIS) Data center expansion is driving energy needs beyond electricity. The backup generation and onsite power systems required to support these facilities are also increasing demand for diesel fuel.

Data centers require backup fuel to ensure uninterrupted operation. And, in most cases, that means diesel-powered generators.

In 2025, diesel generators represented 81% of the global market for data center backup power, though the use of other products including natural gas, renewable diesel and hydrogen has been growing, according to a Mordor Intelligence study.

The India-based research firm noted that North America is the largest market for data center generators.

Goldman Sachs Commodities Research said in May that U.S. data center power demand alone is forecast to more than double to 66 GW in 2027 from 31 GW in 2025 because of an acceleration in artificial intelligence infrastructure. In 2027, data centers are expected to represent 8.5% of U.S. peak summer power demand, up from 4.1% in 2025, “creating significant tightening across the nationeastal power market,” the firm said.

The Uptime Institute, a global advisory firm that evaluates data centers, reported last week that 47% of operators said they had an “impactful” outage in the past three years. Of those, 7% said the outage was “severe” and 17% said the outage was “significant.”

Diesel is playing an increasingly important role in continuing operations during power disruptions, Mansfield Energy said in a July report.

Gainesville, Ga.-based Mansfield distributes a total of more than 3 billion gal of fuel and other products annually. Data centers are among the company’s 8,000 customers across the U.S. and Canada.

In some circumstances, when the electrical grid is under stress, diesel generators may be allowed to run even when there is no emergency. Because of the pace of data center development, long interconnection timelines, growing electricity demand and increasing grid stress, diesel generators could be used more frequently in the future “for momentary grid disturbances, demand response events, planned outages or bridging power,” according to the Better Data Center Project, which advocates for communities facing large-scale data center developments.

The Better Data Center Project, along with environmental advocacy groups, support cleaner energy alternatives to diesel fuel generators.

The Sierra Club notes that northern Virginia has the largest concentration of data centers in the world. The environmental group’s recent study of Virginia air permits suggests that data center diesel generators “have been permitted to emit nearly 13,000 tons of toxic oxides of nitrogen and over 650 tons of particulates, comparable to the largest coal plants in the country.”

A recent report from the Better Data Center Project suggests using battery energy storage systems to eliminate or minimize diesel use. “Several hours of battery capacity can serve as the backup power source for short grid disturbances, most outages and demand response programs,” the organization said.

The report said diesel power generation at data centers is facing growing community opposition and more jurisdictions are supporting tougher environmental standards for diesel generators.

While Mansfield Energy is a major petroleum diesel supplier for data centers, it also promotes renewable diesel use for generators. The company emphasizes renewable diesel is a drop-in fuel that can be used in existing diesel generators, can reduce greenhouse gas emissions and can be blended with regular diesel if supply is tight.

“Despite advances in battery technology and other energy solutions, diesel generators remain the most common power source for large data centers,” the Mansfield report said. “When a utility outage occurs, diesel generators can start within seconds and provide reliable power for extended periods. The technology is well understood, widely available and capable of supporting the large electrical loads required by modern facilities.” READ MORE