Air cooling is cheaper because the engine is constructed more lightly. This system is often seen with a forced cooling (fan), because a lot of air is needed to cool down the engine. The generating set is a stationary machine that cannot receive direct air cooling like a motorbike for example.



With water or liquid cooling, the liquid is pumped around the engine. The liquid eventually arrives in a unit with a large cooling area (the radiator) so it can be cooled down. This cycle is repeated without interruption.
 
The specific heat of water is higher than the specific heat of air. That is why liquid cooling is mostly more effective than air cooling. A disadvantage of water cooling is that a leakage in the liquid tubes can occur and cause a short circuit in the alternator or in the electric part of the generating set. Another disadvantage of water-cooled generating sets is that we are dealing with large, heavy and complex installations. Air-cooled sets mostly only have a fan (ventilator). One of the advantages of water-cooled generating sets is that they are quieter because liquid serves as acoustic insulation.