Probably the most effective power generation option, especially in the middle game, is MineFactory Reloaded BioFuel. As far as materials go, it doesn't require any diemonds, but you will need to do some adventuring as there are some somewhat exotic materials in the recipes.
For a BioFuel setup, you'll need a bio-reactor, a biofuel generator, and a source of organic materials to melt into biofuel. I'd check the official wiki ( look up ^ ) for more info.