The air cooled Lister will produce a far superior standby set. No need for water, water pumps, belts, hoses, antifreeze, no fear of cracking due to a frost. You can let it sit it for 5 years and put on a battery and it will go to work. Fixed speed flyweights and springs are easily available.
I have a Lister SR2 (pre cup, aka IDI) driving a ST5 head by belt drive, 1400 engine rpm. Yes, it is noisier than a water cooled engine but it takes 1/2 of the space, with far less maintenance. These things thrive on neglect.
I just shut the door on the shop and I can't hear it from the house, just 30 feet away. I can run the whole house including the oven with no problem. Test loaded with a 4800 watt construction heater it grunts a little but still has clear exhaust. The TR2 is a modern DI engine. Much more powerful. Go for it, but stay away from the alternate fuels or you will gump up your rings for sure.
Tim SR2