Then you don't solve the core problem of having a big juicy single point of failure. One that is very flammable at that, as Ukraine has proven in Russia recently.

Do you mean a generator that creates diesel from bullshit[1]? Or a diesel generator that generates electricity?

If its the latter, how is your idea decentralized fossil fuel? You are using the same fossil fuel supply chain as it exists today.

For decentralized, you need an oil well in your backyard, and a refinery. THEN a diesel generator, if you want electricity.

[1] Assuming you have enough cows