Diesel farms aren’t green at all.

The owner of Britain’s energy network is gearing up to buy more power from suppliers to ensure the country’s lights stay on, with polluting diesel generators among the providers vying for contracts.

The National Grid needs back-up electricity sources that kick in when, for instance, demand is high but the weather is not breezy enough to power wind farms. It secures this back-up power through the annual capacity market auction that begins on Tuesday and will see controversial “diesel farms” taking part.

This auction process has created lucrative investment opportunities for people to invest in diesel farms, rows of noisy and polluting generators that operate for up to 15 years. In fact, financiers have set up companies specifically to access payments from the National Grid. And while the government is weighing up plans to limit the attractiveness of such investments, many diesel farms have been built and are already delivering returns. Still more could land multimillion-pound contracts this week.

Industry sources said one farm can easily make £5m a year, while non-profit climate analysis firm InfluenceMap today claims the diesel farm industry could pick up £500m in a matter of years. In some cases, investors are also eligible for generous tax breaks. Gas has become an increasingly important part of the UK’s energy mix as coal, due to be phased out by 2025, has been scaled back. Diesel farms are not there to provide power on a routine basis, but to fire up at times of peak use or to help balance second-by-second changes in demand.

While the farms offer a profitable investment, those who live nearby say their lives are blighted by noise pollution and fear of toxic emissions. In Ernesettle, Plymouth, locals told the Guardian they are fed up with generators being built in their quiet neighbourhood.