Diesel Poised to Rise as Grids Look to Deploy Backup Generators at Data Centers

As punishing cold strains electric grids across the US, operators are considering ordering data centers to run diesel-powered backup generators, a move that threatens to push prices for distillate fuel up further.

On Monday, the US Department of Energy authorized PJM Interconnection LLC, the country’s largest power grid operator, and two units of Duke Energy Corp. to direct data centers and other large facilities to run backup generators as a last resort to prevent rolling blackouts. The move effectively allows power destined for industrial-scale customers to be diverted to households and the rest of the grid as heating demand tests the upper limits of electricity supplies.