Is horsepower or torque more important for diesel generators?

The 13 L of course, but in the case of a generator its usually limited somehow, also its more about fuel efficiency with power generation then anything, you want it to last through a storm or power outage for as long as possible and a 13 L will chug way more gas then the 7L, also what kind of engine are these a thirteen liter diesel engine only putting out 400 hp is a joke and it could go higher then 1800 RPM. So yes the 13l would produce more electricity quicker, but the 7L would be more useful and practical.

The 13L would produce more electricity.The smaller generator has to work almost twice as hard to do the same job. Torque is a measure of the turning force on an object such as a bolt or a flywheel. For example, pushing or pulling the handle of a wrench connected to a nut or bolt produces a torque (turning force) that loosens or tightens the nut or bolt. Also the higher the RPM the hard the generator has to work to get to 400hp so your 13L at 3600 RPM would produce around 750 Hp