US Eyes Diesel Generators to Meet Growing AI Power Demand
(Bloomberg) -- The US is looking to tap the nation’s network of large industrial diesel generators used at data centers, big box stores and elsewhere to help curb rising electricity costs and support the surge in power demand from artificial intelligence, according to Energy Secretary Chris Wright.
Such a move could add the equivalent of roughly 35 traditional nuclear power plants worth of electricity and negate the need to build scores of power plants that could cost tens of billions of dollars, Wright said Tuesday at the North American Gas Forum in Washington.
Shares of Generac Holdings Inc., the nation’s leading maker of stationary backup generators, turned positive, rising as much as 1.4%, after Wright made his remarks.
“We’re going to unleash that 35 gigawatts of capacity that sits there today,” Wright said, adding pollution rules have limited their use. “The massive data center build out over the next few years — most of it we can meet with generators.”
Wright, in an interview, added generators already exist at data centers and retail locations such as Walmart Inc., though he mentioned the administration was still studying “the right way to do it.”
“They’re all around the country,” Wright said. “It’s going to start with communication to everyone that these assets exist.”
Wright’s remarks come as electricity prices surge, fueled by demand from artificial intelligence, new factories and electric vehicles. Affordability has become a significant issue for the Trump administration. Nationally, electricity prices have risen roughly 5.1% for the 12 months through September, hovering near a record, government data shows. Residential prices have jumped even higher, rising by 10.5% between January and August 2025, marking one of the largest increases in more than a decade, according to the National Energy Assistance Directors Association.
Most data centers have a long row of big diesel generators lined up outside, unused but ready to turn on quickly to provide backup electricity if the power grid fails. A small data center might have 25 such generators, while big facilities built by hyperscalers have close to 200.
The question of how often diesel generators can run is contentious. Maryland passed a law easing restrictions around the backup units last year, while environmental groups have raised concerns about negative impacts to air quality. Virginia, the home of global hotspot Data Center Alley, has permitted almost 9,000 diesel generators for backup use at the facilities, according to the Piedmont Environmental Council.
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