Generators and alternators: Unit economics
Why a tenth of a per cent is worth real money
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.The generator is a modest share of a power plant's cost and almost never the limiting factor; its economics are about efficiency and uptime. Every 0.1 percentage point of efficiency on a 1,000 MW unit is worth about 1 MW of extra output.
Key costs
| Measure | Value | Note |
|---|---|---|
| Large-generator efficiency | 98.9-99% of shaft power12 | Air-cooled up to 98.9%; hydrogen and water-cooled up to 99%. |
| Losses in a 1,000 MW unit at 99% | about 10 MW of heat (calculated)1 | This heat must be removed by the cooling system. |
| Value of 0.1 point of efficiency | about 0.4 million USD per year (calculated)1 | 1 MW extra for 7,900 hours (90% utilisation) at an assumed USD 50/MWh. |
| Steam turbine generator output, two largest Chinese makers | about 58 (Dongfang); about 28 (Harbin) GW in 202589 | Both also made about 8 GW of hydro generating units. |
| Typical terminal voltage | 18-27 kV1 | For the largest 2- and 4-pole units. |
Where the money goes
| Item | Share or amount |
|---|---|
| Copper (I squared R) losses | main loss source; not quantified in cited sources1 |
| Core losses (eddy current and hysteresis) | second main loss; not quantified in cited sources1 |
Worked example (calculated): a 1,000 MW nuclear generator at 99% efficiency turns about 10 MW into heat, enough to warm thousands of homes, which is why such machines are cooled by hydrogen and water. Raising efficiency to 99.1% would add about 1 MW; running 7,900 hours a year at USD 50 per MWh that is worth about USD 0.4 million a year, or about USD 16 million over 40 years before discounting. Separate capital cost per kW for generators was not found in the sources used; they are normally priced inside the turbine-generator package.
Sources
- GIGATOP generators Arabelle Solutions, 2025
- Air-cooled generators (GEN-A) GE Vernova, 2025
- Dongfang Electric Corporation Limited: Annual results announcement for the year 2025 Dongfang Electric (HKEX filing), 2026
- Harbin Electric Company Limited: Annual results announcement for the year ended 31 December 2025 Harbin Electric (HKEX filing), 2026