Fuel consumption is the major portion of diesel plant owning and operating cost for power applications, whereas capital cost is the primary concern for backup generators. Specific consumption varies, but a modern diesel plant will consume between 0.28 and 0.4 litres of fuel per kilowatt hour at the generator terminals.

However diesel engines can operate on a variety of different fuels, depending on configuration, though the eponymous diesel fuel derived from crude oil is most common. The engines can work with the full spectrum of crude oil distillates, from natural gas, alcohols, gasoline, wood gas to the fuel oils from diesel oil to residual fuels. This is implemented by introducing gas with the intake air and using a small amount of diesel fuel for ignition. Conversion to 100% diesel fuel operation can be achieved instantaneously.

- Fuel cost 11p - 16p/kWh (using red diesel at 40p/litre)
- lifetime engine maintenance about is 0.5p/kWh - 1.0p/kWh

Typical costs of conversion to paralleling for grid operation

To be able to operate in parallel with the mains certain modifications are necessary which include the following:

Approx. £3k to fit a PLC / Genest Controller to the set
Paralleling and synchronising gear and G59 equipment including switchgear modifications (this allows grid connection) Approx £10k
Tidying up set (noise, larger fuel tank) Approx another £5k
So for a 1MW set…£13/kW
50 kW…maybe £260/kW

This capital cost of £13/kW - £260/kW is low compared to combined cycle gas turbines that cost £350/kW.

Dual fuel generator sets

Dual fuel conversion has become more common where the diesel engine is converted to use natural gas as the majority fuel source while diesel is still required as a 'pilot' fuel for the ignition. The conversion to dual fuel makes economical sense when natural gas is available at prices much lower than the diesel fuel equivalent. Dual fuel engines have been known to be operated on alternative and renewable gases, as well as being considered in projects to lower the flaring of gas to the environment.  Such conversions have the added benefit of lowering the engine emissions, because natural gas is a cleaner burning fuel, as well as utilizing indigenous resources which can all add to greater economic benefits.

Source: Wikipedia