New Fact Sheet: Data Centers and Emergency Standby Generators

August 26, 2025

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(Energy Technology Forum) Have you seen our latest fact sheet on data centers and emergency standby generators? It addresses frequently asked questions on this important topic.

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How can backup power systems be made more sustainable?

Since emergency standby generators only operate for periodic readiness testing or in an emergency, their overall impacts are limited. Diesel generators can be specified and equipped to achieve near-zero emissions with advanced emissions controls and substitute renewable biofuels — hydrotreated vegetable oils (HVO) — where available, in place of diesel fuel. Approved by all engine/generator manufacturers, HVO reduces greenhouse gas and other emissions by 50 to 75%. Renewable natural gas is also available for gaseous generators in some areas. READ MORE

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e-Fuels for climate-friendly data centers Rolls-Royce and INERATEC launch partnership (mtu Solutions)
Rolls-Royce Publishes Position Paper with Microsoft on the Use of Hydrotreated Vegetable Oil (HVO) for the Singapore Data Centre sector (Rolls-Royce)
How Biogas Is Solving Data Centers’ Clean Energy Challenge (POWER Magazine/EcoEngineers)

Excerpt from mtu Solutions: In anticipation of rising energy demand: INERATEC's e-Fuels will fuel emergency power systems in data centers

Rolls-Royce and INERATEC, a leading manufacturer of Power-to-X plants and climate-neutral e-Fuels, have formed a strategic partnership to decarbonize backup power for data centers. Their goal: to replace fossil diesel in emergency power systems with synthetic fuels produced from renewable hydrogen and CO2. The collaboration opens up a new and largely overlooked use case for e-Fuels in the digital age—powering critical infrastructure in an increasingly AI-driven world.

Fueling emergency power systems with e-Fuels
Data centers are among the fastest-growing energy consumers, primarily due to the increasing use of artificial intelligence. At the same time, these data centers — some of which form part of critical infrastructure — must be protected against power outages. This is precisely where the partnership between Rolls-Royce Power Systems and INERATEC comes in. The companies intend to use INERATEC's synthetic e-Diesel, which is produced using green hydrogen and CO2, as an alternative to fossil diesel for generators. Initially, the focus will be on German data centers.

Rolls-Royce Power Systems plans to support the use of INERATEC's sustainable fuels in its emergency power systems for data centers. The result is a reliable, cost-efficient, CO2-neutral solution to one of the challenges facing digital infrastructure.

“mtu backup generators from Rolls-Royce are already approved for operation with sustainable fuels. Customers in the critical infrastructure sector, such as data centers, who are aiming to reduce their carbon footprint, will soon also able to use e-fuels. We are committed to the use of e-Fuels in data centers together with INERATEC,” explained Tobias Ostermaier, President Stationary Power Solutions at Rolls-Royce Power Systems.

“The secure energy supply for AI-powered data centers is one of the defining challenges of our time. Our e-Fuels offer a climate-neutral solution that is scalable, dependable and ready for immediate deployment,” said Maximilian Backhaus, Chief Commercial Officer at INERATEC. “Together with Rolls-Royce, we’re bringing this solution to the places where it’s needed most—starting now.”

The collaboration will begin with a focused market launch in Germany. Short delivery routes from INERATEC’s ERA ONE production facility in Frankfurt will enable rapid rollout. INERATEC’s e-Fuels are produced using renewable electricity and captured CO2 and comply with internationally recognized environmental standards such as ISCC. In the long term, the two partners aim to implement their cooperation internationally.

About INERATEC
INERATEC is committed to defossilizing and decarbonizing the world. The company produces e-Fuels and e-Chemicals: carbon-neutral fossil fuel substitutes for use in the aviation, shipping and chemical industries. Its modular, scalable plants use renewable hydrogen and biogenic CO2 to produce synthetic kerosene, gasoline, diesel, waxes, methanol and natural gas. The company is based in Karlsruhe, Germany, and backed by diverse international investors.

About Rolls-Royce Holdings plc

Rolls-Royce is a force for progress; powering, protecting and connecting people everywhere. Our products and service packages help our customers meet the growing need for power across multiple industries; enable governments to equip their armed forces with the power required to protect their citizens; and connect people, societies, cultures and economies together.
Rolls-Royce has a local presence in 48 countries and customers in over a hundred more, including airlines and aircraft leasing companies, armed forces and navies, and marine and industrial customers. 
Through our multi-year transformation programme, we are building a high-performing, competitive, resilient and growing Rolls-Royce. We are building the financial capacity and agility to allow us to successfully develop and deliver the products that will support our customers through the energy transition.
Annual underlying revenue was £17.8 billion in 2024, and underlying operating profit was £2.46 billion.
Rolls-Royce Holdings plc is a publicly traded company (LSE: RR., ADR: RYCEY, LEI: 213800EC7997ZBLZJH69)5.
Rolls-Royce Power Systems is headquartered in Friedrichshafen in southern Germany and employs more than 10,350 people. The product portfolio includes mtu-brand high-speed engines and propulsion systems for ships, heavy land, rail and defence vehicles and for the oil and gas industry. The portfolio also includes diesel and gas systems and battery containers for mission critical, standby and continuous power, combined generation of heat and power, and microgrids. With its climate friendly technologies, Rolls-Royce Power Systems is helping to drive the energy transition.

www.rolls-royce.com READ MORE

Excerpt from Rolls-Royce: Rolls-Royce advocates for targeted policies to unlock HVO’s potential as a transitional low-carbon fuel while other solutions are being developed as low carbon long-term substitutes for fossil diesel

Up to 90% lifecycle CO₂ reduction compared to fossil diesel: HVO enables immediate and significant emission cuts in backup power for data centres using existing infrastructure
Advances Singapore’s leadership in sustainable data centre solutions.

Rolls-Royce’s Power Systems division has released a position paper with Microsoft highlighting the potential of Hydrotreated Vegetable Oil (HVO) as a sustainable transitional fuel for backup power in data centres in Singapore. The paper outlines the opportunities and regulatory conditions necessary to establish HVO and other low-carbon fuels as alternatives to fossil diesel in critical digital infrastructure.

HVO is a high-quality bio-based paraffinic fuel produced from waste, residual fats and oils, which can reduce lifecycle CO₂ emissions by up to 90% compared to fossil diesel and is compatible with existing diesel generator infrastructure without technical modifications, provided the systems are approved for HVO use. For data centres, this provides a practical and immediately deployable solution to decarbonise backup power. It furthermore aligns with Singapore‘s Green Data centre Roadmap (GDCR) and its longer term 2050 net-zero targets.

The position paper identifies priorities to enable full HVO adoption, including harmonisation of standards, ensuring cost competitiveness, streamlining regulatory approvals, strengthening market development and partnerships across the supply chain, and continuing to drive research and innovation.

“We believe that Singapore is well-positioned to lead the adoption of HVO with the right policy framework, infrastructure and support.” said Tobias Ostermaier, President Stationary Power Solutions at Rolls-Royce Power Systems. “HVO is a practical step to decarbonise critical infrastructure and provides an immediately deployable lever to reduce emissions for the potential-rich data centre sector. What’s needed now is a clear regulatory framework to support the use of sustainable fuels like HVO, which will enable planning certainty and investment confidence.”

Giovanni Spadaro, President, Global Markets, Rolls-Royce Power Systems, added:

As the regional digital economy accelerates, data centres have become a critical growth driver for both Singapore and Asia. Rolls-Royce Power Systems is committed to unlocking its potential via carbon-efficient fuel solutions. This can serve as a sustainable source of power that provides growth and is aligned with key national goals such as the Green Data Centre Roadmap. It is vital that we continue working with our partners, including Microsoft, to create the necessary conditions that can make this a reality.”

Kavickumar Muruganathan, Cloud ESG Planning Director Microsoft APAC said,

This paper underscores our commitment to fostering innovation in low-carbon energy sources. By aligning with Microsoft's global 2030 sustainability ambitions, we are dedicated to driving solutions that not only meet our current energy needs but also pave the way for a carbon-negative future. Our collaboration in this highlights our resolve to lead the charge in decarbonising at scale and promoting low-carbon fuels across the region." READ MORE

Excerpt from POWER Magazine/EcoEngineers: Produced through the anaerobic digestion of organic waste, biogas can be converted into electricity at or near the point of generation, such as at landfills, farms, or wastewater treatment plants. These distributed generation assets offer a reliable, renewable alternative to fossil-based grid electricity and can be deployed at a relatively higher speed to market than traditional generation facilities.

There is a renewed opportunity to pair waste management with power demand. Data centers, if they want always-on, renewable electricity, can source it from biogas projects that also help communities manage waste more sustainably.

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Biogas typically contains 45% to 70% methane, with the remainder composed mostly of carbon dioxide (CO2) and trace amounts of other gases like hydrogen sulfide, nitrogen, and water vapor. When burned in a generator, biogas can produce baseload electricity with capacity factors comparable to fossil-based natural gas, but without the climate penalty. Biogas projects deliver dual environmental benefits: avoiding methane emissions from waste and displacing fossil energy. Methane is 25 to 80 times more potent as a GHG gas than CO2 over a 20-year horizon.

The U.S. hosts approximately 2,500 operational biogas systems, with the potential to add another roughly 17,000 sites, which is enough to generate about 194 million megawatt-hours (MWh) annually and displace the CO2equivalent of removing 2.6 million cars. Despite this promise, progress is slowed by limited long-term power purchase agreements (PPAs) and waning renewable credits.

Biogas vs. Other Energy Sources

When comparing clean energy options for data centers, the choice isn’t just about which fuel has the lowest emissions—it’s about balancing emissions, cost, scalability, reliability, and speed to market. Biogas stands out as a carbon-smart, cost-effective, and rapidly deployable solution that can reduce reliance on centralized fossil fuel infrastructure, while also supporting rural economies by creating jobs and revenue streams for farmers, landowners, and municipal wastewater treatment facilities.

Biogas engines operate 24/7, making them a vital asset that is essential for maintaining data center uptime. Additionally, co-located biogas projects can serve as microgrids capable of islanding during grid-wide events. Low-impact interconnections mean less dependence on new transmission, a persistent bottleneck in many regional grids.

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Despite its promise, biogas-to-power remains disadvantaged by a lack of policy and market parity with other renewables. Technologies like solar and wind benefit from longstanding tax credits, favorable project financing, and inclusion in most renewable portfolio standards (RPS). Biogas, by contrast, is often excluded from those frameworks or limited in scale and credit eligibility.

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Biogas may not be the largest renewable source, but it’s uniquely positioned to meet near-term baseload demand with low-carbon, reliable, and dispatchable power. In the regions managed by grid operators, with capacity constraints tight and emissions targets firm, biogas-to-electricity offers one of the fastest, lowest-risk paths to decarbonization for data center infrastructure. By linking societal waste with server workloads, this model not only cleans the planet, but it also powers its future. Furthermore, biogas aligns with the current administration’s goals for energy dominance by reducing dependence on imported fuels, lowering emissions, and offering a reliable energy source at a cost-effective price. It turns waste into a strategic asset, supporting domestic energy security, environmental resilience, and infrastructure stability—a true win-win-win.

—Dave Lindenmuth (dlindenmuth@ecoengineers.us) is senior director of Growth and Development with EcoEngineers, an LRQA company. READ MORE