Microsoft researchers have proposed rack mounted fuel cells to power servers in a data centre (No More Electrical Infrastructure: Towards Fuel Cell Powered Data Centers by Ana Carolina Riekstin, Sean James, Aman Kansal, Jie Liu, and Eric Peterson, Microsoft Data Center Genome Project, November 2013). But this is not the only option for local power generation. Natural gas can also be used to generate electricity, with modified internal combustion engines. Micro-turbines are now small enough that they could be located at each row of servers, if not in each rack. This might be an interesting topic for the students doing my ICT Sustainability Course to investigate.
Syracuse University has twelve 780 kW microturbines, but these are in a centralized facility, not distributed. The units are in two groups of three each on a separate power bus. Heat from the turbines is directed to absorption chillers for cooling the servers. Recovering energy from the waste heat would be much more difficult if the generators were distributed around the racks.