# Generators and alternators: Unit economics

Why a tenth of a per cent is worth real money

Source page: https://www.materialinsights.org/energy/e_generators/economics/

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 power^[1](https://arabellesolutions.com/our-technology/generators-for-nuclear-power-plants/gigatop-generators)^[2](https://www.gevernova.com/gas-power/products/generators/air-cooled) | 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](https://arabellesolutions.com/our-technology/generators-for-nuclear-power-plants/gigatop-generators) | 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](https://arabellesolutions.com/our-technology/generators-for-nuclear-power-plants/gigatop-generators) | 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 2025^[8](https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0331/2026033103547.pdf)^[9](https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0326/2026032603158.pdf) | Both also made about 8 GW of hydro generating units. |
| **Typical terminal voltage** | 18-27 kV^[1](https://arabellesolutions.com/our-technology/generators-for-nuclear-power-plants/gigatop-generators) | 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 sources^[1](https://arabellesolutions.com/our-technology/generators-for-nuclear-power-plants/gigatop-generators) |
| **Core losses (eddy current and hysteresis)** | second main loss; not quantified in cited sources^[1](https://arabellesolutions.com/our-technology/generators-for-nuclear-power-plants/gigatop-generators) |

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

1. [GIGATOP generators](https://arabellesolutions.com/our-technology/generators-for-nuclear-power-plants/gigatop-generators) Arabelle Solutions, 2025
2. [Air-cooled generators (GEN-A)](https://www.gevernova.com/gas-power/products/generators/air-cooled) GE Vernova, 2025
3. [Dongfang Electric Corporation Limited: Annual results announcement for the year 2025](https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0331/2026033103547.pdf) Dongfang Electric (HKEX filing), 2026
4. [Harbin Electric Company Limited: Annual results announcement for the year ended 31 December 2025](https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0326/2026032603158.pdf) Harbin Electric (HKEX filing), 2026

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_generators/index.md)
- [Overview](https://www.materialinsights.org/energy/e_generators/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_generators/correlation/index.md)
- [Science and limits](https://www.materialinsights.org/energy/e_generators/science/index.md)
- [Value chain](https://www.materialinsights.org/energy/e_generators/valuechain/index.md)
- [Engineering methods](https://www.materialinsights.org/energy/e_generators/methods/index.md)
- [Equipment and suppliers](https://www.materialinsights.org/energy/e_generators/equipment/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_generators/links/index.md)