A device that converts mechanical energy to electrical energy is known as a generator. A generator is quite similar to that of a water pump. A water pump creates a flow of water but it does not create water. A generator also creates flow of charges through its wires but does not create electricity. In most cases the source of mechanical energy required for the functioning of a generator comes from:

1. Water falling from a height through a turbine.
2. A wind turbine.
3. An internal combustion engine
4. Compressed air.

Generators are divided into two major categories depending upon the source of current i.e., Alternating current (AC) and Direct current (DC). Though the basic working principles of both these generators are similar, they differ in construction. These machines are also classified on the basis of the source of the mechanical energy by which they are powered, like water or steam power.

If a coil of wire, kept in a magnetic field and connected to a galvanometer, is rotated then current will be induced within the coil. When current gets induced the galvanometer shows deflection. Factors on which the magnitude of induced current depends are:

1. Strength of the magnetic field.
2. Length of the coil.
3. Velocity with which the coil rotates within the field.

The main idea behind the rotation of the coil is to make it in motion with respect to the magnetic field. Although in most cases, DC generators have a stationary magnetic fiels and a rotating coil and vice-versa for AC generators.

For an electric generator, the galvanometer gets replaced by some electrical device. The electric power produced by the generator changes constantly as the coil moves through the magnetic field. Initially the induced current moves in a single direction. When the coil becomes parallel to the magnetic lines of forces, the current produced is zero. Thereafter, the lines of forces are cut in the opposite direction by the coil as it continues to rotate. Hence, the generated current also flows in the opposite direction. Now, as a result, a rotating coil in a fixed magnetic field of this type will produce alternating current. This type of current travels in one direction for a moment and then the opposite direction at the next moment. Alternating current is used in most household appliances. Keeping a soft iron core inside the coil of wire can increase the efficiency of a generator. Longer the wire greater will be the efficiency.

Direct current electricity can be produced by modifying an AC generator. A commutator helps in doing the needful. A commutator basically is a half cut slip ring, with both the halves insulated from each other. The brushes slip from one half of the commutator to the other when the direction of the current in the coil reverses. They are arranged in a manner to make the slip easy. As a result of which the external circuit current always flow in the same direction making it a direct current.

A diesel engine and an electric generator combine to become a diesel generator to generate electric energy. It is commonly called an alternator. Power generators such as a diesel generator are used in places without connection to the power grid. These generators are used as power supplies on constructon sites or for vehicles. Fuel consumption constitutes of the major portion of cost for a diesel generator. A modern diesel generator may consume between 0.28 and 0.4 litres of fuel per kilowatt hour. However these generators can as well work on a variety of different fuels like diesel fuel derived from crude oil.