Phinergy Showcases Clean Alternative to Diesel Backup Generators for Data Centers

The company’s technology is designed to replace diesel generators in data centers and ensure continuous operation during grid outages. Phinergy is targeting a data center backup power market estimated at approximately 140GW and valued at $150-200 billion over the next five years

The rapid growth of artificial intelligence is driving an unprecedented wave of data center construction worldwide, increasing the industry’s reliance on thousands of diesel generators used as emergency backup systems during power outages and grid disruptions.

This week, Phinergy showcased its Aluminum-Air Generator (AAG) at Datacloud Global Congress in Cannes. The event comes at a time when the AI industry is searching for solutions to one of its biggest challenges: providing reliable power to a rapidly growing number of data centers.

Efforts to find alternatives to diesel generators for data centers have been accelerating across the industry. For example, in Virginia, home to one of the world’s largest concentrations of data centers, more than 10,500 diesel generators are currently in operation. This has sparked growing public criticism and opposition from local communities and planning authorities due to environmental and public health concerns. The market for data center backup power solutions is expected to reach approximately $150-200 billion over the next five years, driven in part by rising demand for AI infrastructure. As AI deployment accelerates, so does the search for solutions that can support growth without increasing dependence on diesel-powered backup systems.

Phinergy’s Aluminum-Air technology generates electricity through an electrochemical reaction between aluminum and oxygen from the air. Aluminum serves as the system’s energy source, playing a role similar to diesel fuel in a conventional generator. Unlike diesel systems, the process involves no combustion and produces no on-site CO2, NOx, or SOx emissions. The system can provide up to 48 hours of power per energy load, with runtime extended through the replacement of aluminum plates.

The solution was developed for data centers and other critical facilities and is designed to integrate with both existing electrical infrastructure and next-generation data centers built for AI workloads. The system delivers response times comparable to conventional diesel generators while eliminating the need for fuel storage and on-site emissions.

Data center operators are increasingly facing stricter environmental regulations and lengthy permitting processes for diesel generators, creating a growing obstacle to new project development. Emissions restrictions, opposition from local communities, and concerns about building large-scale facilities near residential areas are creating planning uncertainty and delaying projects worth billions of dollars.

Phinergy’s backup power solution provides a zero-emission alternative to diesel generators and helps operators address some of these regulatory challenges. By eliminating on-site emissions and the need for fuel storage, the system enables compliance with stringent environmental requirements, shortens approval timelines, and supports the deployment of large-scale AI infrastructure in environmentally sensitive locations.

Phinergy’s Aluminum-Air technology was selected by the Net Zero Innovation Hub, a consortium led by Google and Microsoft, as a preferred zero-emission alternative to diesel generators for data centers. The company’s technology was selected from more than 70 solutions submitted to the consortium as part of its search for clean and scalable backup power technologies for the data center industry.

The company is currently participating in a joint project with Net Zero that serves as industry validation of its technology and product. In addition, Phinergy has received letters of intent from leading industry players for potential deployment of its solution at cumulative gigawatt-scale capacity, subject to completion of the validation process.

“The growing demand for artificial intelligence is driving rapid expansion of data centers and increasing the need for reliable backup solutions that can ensure operational continuity during emergencies,” said Emmanuel Levy, CEO of Phinergy.

“Data center operators are looking for solutions that can provide the same level of reliability and availability as diesel-based systems, but without the lengthy permitting processes, regulatory constraints, and environmental impact that accompany them. We believe Aluminum-Air technology can help the industry meet the energy demands of the AI era, significantly reduce dependence on diesel generators, and lower project risk for new data center developments.”

Phinergy, which is publicly traded on the Tel Aviv Stock Exchange, has developed aluminum-based power generation technology and focuses on long-duration backup power solutions for data centers and critical facilities.

Last year, the company’s Aluminum-Air technology was selected by the Net Zero Innovation Hub, a consortium that includes leading global industry players such as Google, Microsoft, Schneider Electric, Vertiv, Danfoss, and Data4, to participate in a validation project focused on backup power solutions for data centers.