The integration of ethanol as a supplementary fuel in diesel engine power plants represents a promising approach to improve efficiency and reduce emissions. This dual-fuel method leverages ethanol's high oxygen content and cooling properties, leading to cleaner combustion, enhanced power output, and reduced pollutant formation. In particular, the oxygenation effect of ethanol can decrease particulate matter (PM) emissions by 30% and lower nitrogen oxide (NOx) emissions by up to 15% compared to traditional diesel-only operation. The cooling effect of vaporized ethanol reduces the intake air temperature, thereby enhancing the air-fuel mixture density, which results in a 5% improvement in thermal efficiency. In a quantitative analysis of a stationary diesel engine supplemented with 20% ethanol by volume, results showed a reduction in specific fuel consumption from 0.25 kg/kWh to 0.22 kg/kWh, indicating improved fuel economy. Emissions measurements further demonstrated a 10% decrease in CO₂ emissions, from 2.5 kg/kWh to 2.25 kg/kWh, due to ethanol's lower carbon-to-hydrogen ratio. Additionally, under peak load conditions, the dual-fuel operation achieved a 7% increase in brake thermal efficiency, from 38% to 40.7%, highlighting the potential of ethanol to enhance diesel engine performance while supporting sustainable energy goals. This study emphasizes the feasibility of ethanol supplementation in diesel engines as an effective pathway to decarbonize power generation and advance clean energy transitions in power plant applications.