April 8 (Reuters) - Power equipment maker Generac

Holdings ( GNRC ) said on Tuesday that it was launching new

generators with its biggest capacity offering till date in North

America, designed for data centers as the company sees rising

demand from the segment.

The expected build-out of the centers has raised concerns

around how well an aging U.S. electrical grid can hold up to

that demand, with electricity consumption likely to hit record

highs.

Additionally, older generators that run on fossil fuels are

being retired and new generation and power lines are often stuck

in large queues to be connected to the gird, which tightens the

supply-demand balance.

Generac's ( GNRC ) new generators for the North American market,

which range from 2.25 megawatts (MW) to 3.25 MW, are a step up

from its current maximum capacity of 2 MW, said Ricardo Navarro,

senior vice president and general manager of the company's

global telecom and data center infrastructure section.

The company, which currently serves smaller data center

demand, has already received commitments for the new generators

for this year and the next, Navarro said in an interview with

Reuters.

In Generac's ( GNRC ) fourth quarter earnings for 2024, the company

reported a better-than-expected profit due to higher power

outages and severe weather impacts from hurricanes Helene and

Milton.

Big storms typically create a burst of new business for the

Waukesha, Wisconsin-based company, whose generators are designed

to be permanently fixed and switched on automatically whenever

there's a power outage.

Due to the overall high demand for backup power options,

most companies are constrained in that they are not able to

supply as much as is needed and as quickly, Navarro highlighted.

"With more than half of our factories being in the U.S., we

have shorter lead times," he said, adding that the company's

flexible supply chain would be able to navigate through the

challenges the new tariffs pose.