Data Center Generators Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product Type (Diesel, Gas, Others), By Capacity (< 1 MW, 1MW-2MW, >2MW), By Tier Standards (Tier I & II, Tier III, Tier IV), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 8.85 Billion
CAGR (2026-2031)	7.46%
Fastest Growing Segment	>2 MW
Largest Market	North America
Market Size (2031)	USD 13.63 Billion

Market Overview

The Global Data Center Generators Market will grow from USD 8.85 Billion in 2025 to USD 13.63 Billion by 2031 at a 7.46% CAGR. Data center generators are specialized backup power systems designed to provide immediate electricity to servers and cooling infrastructure during utility grid failures. The market is primarily driven by the critical need for continuous uptime in financial, healthcare, and cloud services, alongside the rapid construction of hyperscale facilities to manage escalating global data volumes. This infrastructure scale is substantial; according to the International Energy Agency, in 2024, global data center electricity consumption was estimated to be approximately 415 terawatt-hours.

However, market expansion is significantly challenged by stringent environmental regulations and the global push for decarbonization. Operators face increasing pressure to replace traditional diesel fuel systems with low-emission alternatives to meet sustainability compliance standards, creating technical and financial hurdles for both legacy retrofits and new project developments.

Key Market Drivers

The exponential growth of hyperscale and cloud computing infrastructure acts as the primary catalyst for market expansion, as major technology corporations aggressively scale their physical footprints to support digital services. Hyperscale operators require immense backup power capacities to guarantee uninterrupted service availability across their sprawling campus environments, directly translating into high-volume orders for large-capacity generator sets. This aggressive infrastructure buildout is evidenced by significant capital allocations; according to Microsoft, January 2025, in a corporate blog post, the company announced plans to invest $80 billion in the current fiscal year to expand its data center and artificial intelligence infrastructure.

Simultaneously, surging power density demands from artificial intelligence workloads are reshaping the technical requirements and revenue potential for backup power manufacturers. AI-dedicated facilities utilize high-performance computing clusters that consume significantly more electricity per square foot than traditional servers, necessitating robust, high-output generators capable of handling rapid load steps. The financial impact of this shift is visible in manufacturer performance; according to Cummins Inc., February 2025, in its quarterly earnings release, sales in the Power Systems segment increased by 22% to $1.7 billion, driven primarily by strong global demand for data center applications. Furthermore, the broader energy demand trajectory underscores this trend; according to Dominion Energy, February 2025, in the company's fourth-quarter earnings call, the utility reported a contracting backlog of approximately 40 gigawatts for data center capacity, highlighting the massive scale of future power needs.

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Key Market Challenges

The Global Data Center Generators Market is facing substantial headwinds due to the intensifying pressure of stringent environmental regulations and the global mandate for decarbonization. As governments and regulatory bodies impose tighter emissions standards, the industry's traditional reliance on diesel-powered backup systems has become a significant liability. This regulatory landscape creates a complex barrier to entry for new projects and complicates retrofits for existing facilities. Operators are frequently encountering delays in permitting processes or facing outright rejections for diesel-heavy infrastructure plans, forcing a costly and technically difficult search for cleaner alternatives that often lack the established reliability of legacy systems.

This disconnect between regulatory expectations and industry readiness is evident in recent operational data, which highlights the struggle to adapt. According to the Uptime Institute, in 2024, fewer than half of data center owners and operators were tracking the metrics needed to assess their sustainability or to meet pending regulatory requirements. This significant gap in compliance preparedness indicates that a large portion of the market is ill-equipped to navigate the evolving legal framework, directly stalling the deployment of standard power generation assets and hampering overall market expansion.

Key Market Trends

The Widespread Adoption of Hydrotreated Vegetable Oil (HVO) as a Diesel Substitute is reshaping the fuel landscape for backup power as operators seek immediate carbon reduction without replacing existing infrastructure. HVO serves as a drop-in fuel for standard diesel engines, allowing facilities to lower lifecycle greenhouse gas emissions by up to 90% while bypassing the technical complexities and capital costs associated with hydrogen or battery retrofits. This transition is accelerating rapidly across Europe and Asia, where sustainability mandates are most acute, driving manufacturers to validate and deploy renewable fuel-ready engines at scale. According to Rolls-Royce Power Systems, November 2025, in a press release highlighting its partnership with AVK, the companies successfully delivered over 500 HVO-powered generator sets to data centers in 2024, representing nearly 1.3 gigawatts of standby capacity.

The Utilization of Gas Generators as Temporary Prime Power to Bridge Grid Connection Delays has emerged as a critical strategy to maintain construction timelines amidst severe utility congestion. With transmission upgrades lagging behind the explosive pace of facility development, operators are increasingly deploying natural gas generators as the primary energy source for extended periods, rather than solely for emergency backup. This approach creates an "island mode" capability that allows data centers to go online years before a permanent grid connection is secured, effectively decoupling operational readiness from utility bottlenecks. According to Caterpillar Inc., August 2025, in a strategic agreement announcement with Hunt Energy, the company committed to deploying up to 1 gigawatt of independent power generation capacity specifically to support data center projects facing these infrastructure limitations.

Segmental Insights

The >2 MW segment is currently the fastest-growing category within the Global Data Center Generators Market, primarily driven by the massive scale of modern hyperscale facilities and colocation centers. As data centers increase rack power density to support artificial intelligence and cloud computing, operators prefer high-capacity generators to maximize power output per square foot. Deploying fewer, larger units significantly reduces installation complexity and maintenance requirements compared to multiple smaller sets. This strategic consolidation allows facilities to meet rigorous uptime standards efficiently while accommodating the surging energy demands of the digital economy.

Regional Insights

North America maintains a dominant position in the global data center generators market, driven by the dense concentration of hyperscale data centers and cloud service providers within the United States. The region exhibits a critical demand for uninterrupted power to ensure operational continuity, thereby increasing reliance on reliable backup power systems. Additionally, stringent emissions standards established by the Environmental Protection Agency drive the adoption of compliant generator technologies. This specific regulatory framework, combined with sustained investment in digital infrastructure expansion, anchors North America as the leading regional market.

Recent Developments

• In October 2025, Rolls-Royce introduced new fast-start mtu gas generator sets to address the evolving power needs of the Global Data Center Generators Market. The company unveiled enhanced mtu Series 4000 gas engines capable of delivering their full power output in just 45 seconds, a critical capability for stabilizing power supplies during grid interruptions. These systems were developed to offer a lower-carbon alternative to traditional diesel generators, with the flexibility to operate on natural gas or sustainable fuels. The innovation targeted the increasing energy demands of artificial intelligence workloads while supporting the industry's sustainability goals.
• In April 2025, Generac Holdings Inc. strengthened its portfolio in the Global Data Center Generators Market by launching a new line of high-capacity emergency standby generators. The release featured five new models with power outputs ranging from 2.25 MW to 3.25 MW, specifically engineered to serve the demanding requirements of hyperscale, colocation, and enterprise data centers. These generators were designed to function within modular power systems, enabling seamless integration with battery storage and other energy technologies. This development aimed to provide scalable and resilient power solutions to support the rapid growth of data infrastructure.
• In June 2024, Cummins Inc. expanded its product offerings in the Global Data Center Generators Market by releasing the Centum Force containerized generator sets for 50Hz markets globally. These fully integrated, high-density power solutions were designed to address the urgent need for rapid deployment and scalable onsite power in critical infrastructure. The containerized units, capable of delivering substantial power output, offered a turn-key solution for data center operators facing grid constraints and power shortages. This launch emphasized the company's focus on providing flexible and efficient backup power systems to support the expanding digital footprint.
• In January 2024, Caterpillar Inc. announced a successful collaboration with Microsoft and Ballard Power Systems to demonstrate the viability of using large-format hydrogen fuel cells for backup power in data centers. The project simulated a 48-hour power outage at a data center in Cheyenne, Wyoming, where a hydrogen fuel cell system was integrated into the facility's electrical plant to support critical loads. This initiative validated the performance of hydrogen technology under challenging conditions, highlighting its potential to meet the rigorous 99.999% uptime requirements of the Global Data Center Generators Market while significantly reducing carbon emissions.

Key Market Players

• Caterpillar Inc.
• Schneider Electric SE
• Eaton Corporation plc
• Perkins Engines Company Limited
• Honda Motor Co., Ltd.
• Yanmar Holdings Co., Ltd.
• Mitsubishi Heavy Industries, Ltd.
• Wärtsilä Corporation
• KOHLER Co.
• Generac Power Systems, Inc

By Product Type	By Capacity	By Tier Standards	By Region
Diesel Gas Others	< 1 MW 1MW-2MW >2MW	Tier I & II Tier III Tier IV	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Data Center Generators Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Data Center Generators Market, By Product Type:

• Diesel
• Gas
• Others

• Data Center Generators Market, By Capacity:

• < 1 MW
• 1MW-2MW
• >2MW

• Data Center Generators Market, By Tier Standards:

• Tier I & II
• Tier III
• Tier IV

• Data Center Generators Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE