Power Generation: what it is, trends, and main types of power generation

The generation of electricity is essential to modern society, as it powers industries, cities, and homes. There are several ways to generate it, each with its own characteristics, advantages, and challenges.

In this article, you will understand what power generation is, learn about the main types, and dive into the concepts of solar and wind energy. In addition, you will understand the concept of distributed generation (in comparison with traditional centralized generation), including modalities such as shared solar generation and selling energy to the grid.

What is power generation?

Electric power generation is the process of producing electricity from other forms of energy – be it the mechanical energy of a moving turbine, the heat from burning fuel, sunlight captured by a photovoltaic panel, or another source. That is, a primary energy (from wind, sun, water, chemical or nuclear reactions) is taken and converted into usable electricity for homes, industries, and other applications.

This generation usually happens in power plants, which house the necessary equipment to perform the conversion. Depending on the source, a plant can be, for example, a hydroelectric plant (converting water's potential energy into electricity through hydraulic turbines and generators) or a thermal power plant (converting the chemical energy of fuels into heat and then into electricity). In all cases, the electricity produced is delivered to the power system for distribution to consumers.

Electric power generation is a pillar of modern infrastructure – practically all daily activities depend on it, from lighting, transportation, and communications to industrial processes. Therefore, ensuring efficient and sustainable forms of power generation is a strategic challenge to meet the growing electricity demand reliably.

Types of electric power generation

With technological advancements, various forms of power generation have emerged, which can be classified into renewable sources (that regenerate naturally or are inexhaustible, such as sun and wind) and non-renewable sources (such as fossil fuels and nuclear). The main forms of electric generation include:

• Hydroelectric Energy: uses the power of river water (waterfalls or reservoirs) to move hydraulic turbines coupled to generators. It is renewable and has low operational cost, accounting for most electricity in Brazil.
  
  
• Thermal Power from Fossil Fuels: burning mineral coal, oil (fuel oil or diesel), or natural gas to produce heat and, consequently, electricity via steam turbines. Although widely used worldwide, it emits greenhouse gases and air pollutants.
  
  
• Nuclear Energy: uses the fission of atoms (like uranium) in a nuclear reactor to generate heat, which produces steam and drives turbines. It does not emit CO₂ during generation and has high energy density, but it produces radioactive waste that requires safe storage and involves high costs and strict safety protocols.
  
  
• Wind Energy: harnesses wind power. Wind turbines (aerogenerators) with large blades rotate when driven by the wind, powering an electric generator. It is a clean and rapidly expanding renewable source, although intermittent (depends on wind availability).
  
  
• Solar Photovoltaic Energy: directly converts sunlight into electricity through solar panels (photovoltaic cells). It is an abundant and modular renewable source (can be installed from residential rooftops to large solar farms), but its generation varies with sunlight incidence (day/night and weather conditions).
  
  
• Biomass: uses organic matter (sugarcane bagasse, wood, waste biogas, etc.) as fuel in boilers to generate electricity similarly to a thermal plant. It is renewable since the CO₂ emitted during burning is reabsorbed during plant growth, although it emits atmospheric pollutants and residues (ash). In Brazil, it is common in sugar and ethanol mills that burn bagasse for cogeneration.
  
  

All sources have advantages and disadvantages in their operation, economic impact, and environmental footprint. Understanding this mix is key to balancing investments and technical decisions.

How does solar energy generation work?

Photovoltaic solar energy is generated through solar panels that convert sunlight directly into electricity. Each panel contains photovoltaic cells made of semiconductor material (such as silicon) which, when struck by solar radiation, release electrons and produce a direct electric current. A device called an inverter converts this direct current into alternating current, with the proper characteristics for use in the electrical grid and common electric devices. This entire process occurs silently and with no moving parts, making solar generation very simple and clean to operate.

Solar energy can be used on a small scale — for example, panels installed on the roofs of houses and businesses — or on a large scale, in solar farms with thousands of panels in open areas. It is an intermittent source (it only generates during the day, and production varies depending on sunlight and weather), but it has been growing rapidly thanks to falling equipment costs and environmental benefits. Globally, photovoltaic solar generation already accounts for about 7% of all electricity produced and continues to expand year over year. In Brazil, installed solar capacity has grown exponentially in the last decade, driven by both large solar farms and millions of distributed systems on rooftops.

How does wind energy generation work?

Wind energy is generated from the force of the wind. Large wind turbines (aerogenerators) are installed; their blades are moved by the wind, spinning a rotor connected to an electric generator. Thus, the wind’s kinetic energy is converted into rotational mechanical energy and then into electricity. Wind farms typically consist of dozens or hundreds of aerogenerators in areas with strong, steady winds (such as coastal or open regions). The electricity from each turbine is carried by cables to a substation and then integrated into the electric grid.

As a renewable source, wind energy does not emit pollutants during generation. Its main challenge is intermittency — production varies with wind intensity. Still, technological advances have increased turbine efficiency and improved wind forecasting, enabling greater integration of this source into the grid.

Today, wind power represents about 10% of global electricity generation and is already the second-largest source of electricity in Brazil during certain periods (especially during windier months in the Northeast). The rapid growth of wind farms has made this source a major driver in expanding clean energy supply worldwide.

What is distributed energy generation?

Distributed generation (DG) is the production of electricity near the point of consumption, usually on a small scale, by consumers who also become generators. Instead of relying solely on large, distant power plants (centralized generation), DG allows homes, businesses, and industries to install their own generation systems — such as rooftop solar panels or small wind turbines — supplying part or all of their demand.

In Brazil, DG gained momentum with the regulation of the net metering system, in which consumers who generate excess energy can inject it into the grid and receive credits to offset their future electricity bills. This made the spread of systems, especially solar photovoltaic systems on rooftops, economically viable across the country. The result has been exponential growth: today, there are hundreds of thousands of distributed micro and mini generators connected to the grid, totaling several gigawatts of installed capacity.

DG offers benefits such as reduced losses (by generating close to the point of use) and a more diversified supply, but also poses management challenges for utilities, which have had to adapt to this shift in the power sector paradigm.

Distributed Energy Generation vs. Centralized Energy Generation

Location and scale

In centralized generation, large power plants (hundreds or thousands of MW) are generally located far from consumption centers and send electricity through long transmission lines to cities. In distributed generation, multiple small generators (from a few kW to a few MW) are installed near or at the site of consumption, injecting power directly into the local distribution grid. This reduces transport losses but requires a grid prepared for bidirectional energy flow.

Operation and control

In traditional centralized generation, system operation is simpler, with a few large plants dispatched according to demand, under the direct control of the national operator. In distributed generation, the challenge is to coordinate thousands of scattered sources without centralized control over each one. This requires smart grid management systems to maintain energy stability and quality, safely integrating DG into the system.

How does shared solar energy generation work?

Shared generation is a DG model in which several consumers come together to share the energy generated by a single solar plant. It works like this: a group of people or companies forms a cooperative or consortium and installs a joint solar farm (e.g., on rented land). The electricity produced by this plant is injected into the utility grid, and the energy is converted into credits divided among the participants, discounting each electricity bill proportionally. In other words, even those who cannot or do not want to have solar panels on their property can join a group and benefit from remotely generated solar energy, receiving a discount on their bill as if they had their own panels.

This arrangement offers several advantages:

• Energy inclusion: allows consumers without a suitable place to install panels (e.g., apartment dwellers or renters) to access solar energy benefits.
  
  
• Economy of scale: larger shared projects tend to have lower costs per kWh generated than many small systems, improving economic feasibility and return for all participants.
  
  
• Site optimization: enables panels to be installed where sunlight incidence is better and space is available, maximizing production — such as using rural areas or warehouse rooftops, even if consumers are in urban areas.
  
  

Shared generation is regulated by ANEEL in Brazil to ensure that cooperative/consortium members are within the same utility’s concession area. In recent years, this concept has gained popularity, with companies offering “subscriptions” to solar farms, further democratizing access to clean energy.

Solar power generation for sale

In addition to using solar energy for self-consumption, it is also possible to generate energy for commercial purposes. In Brazil, this occurs in two main ways:

• Large-scale solar power plants: projects developed to sell energy at scale. This sale can happen in the regulated market (through government auctions, where distributors purchase production from solar farms via long-term contracts) or in the free market (via bilateral contracts with large consumers or energy traders, known as PPAs). Many recent solar developments have followed these models, supplying distributors or companies with 100% renewable energy.
  
  
• Micro/mini distributed generation with surplus: small producers (such as rooftop photovoltaic system owners) generally don’t sell energy directly, but inject surplus into the grid and receive credits to offset future bills. Thus, they save the equivalent of the energy supplied to the grid. Although there is no direct financial compensation for the surplus, there is a real gain through reduced expenses. Creative business models have emerged in this context, such as cooperatives and companies that allow third parties to benefit from the credits generated by a shared solar farm.
  
  

In short, solar energy has also become a commercial product: large plants negotiate megawatts through wholesale contracts, while small generators reduce expenses or even serve other consumers through compensation schemes. The demand for clean electricity has driven these sales arrangements, making solar a significant player in the energy market.

Energy conversion through waste (residues)

Also called Waste-to-Energy (WtE), power generation from waste consists of using solid waste to produce electricity. One method is the incineration of urban waste in specially designed plants: non-recyclable trash is burned in furnaces, and the generated heat is used to produce steam that drives turbines, generating electricity. This process significantly reduces the amount of waste sent to landfills and simultaneously harnesses the energy content of the residues. Plants of this type operate in various countries in Europe and Asia — equipped with filters and emission control systems to minimize the release of toxic pollutants from burning waste.

Another way to generate energy from waste is through biogas. In landfills, anaerobic decomposition of organic matter produces gases (mainly methane) that can be captured through piping. Instead of releasing this methane (a potent greenhouse gas) into the atmosphere, it is channeled to engines or turbines that generate electricity. There are projects in Brazil and worldwide that use landfill gas this way, turning an environmental liability into a useful energy source. Similarly, separated organic waste (such as food scraps and manure) can be processed in biodigesters to produce biogas and then generate electricity in small generators.

Currently, the share of waste-to-energy in the power matrix is small, especially in Brazil. High costs and technical challenges have slowed its progress. However, as pressure increases for sustainable waste treatment solutions, interest in WtE plants and landfill biogas projects is growing. In addition to generating renewable energy, these initiatives help reduce pollution and uncontrolled methane emissions, combining waste management and electricity generation in a circular economy strategy.

What is the most used form of power generation in the world?

Globally, electricity generation is still dominated by fossil fuels. Coal-fired thermal power plants are currently the most used form of energy generation worldwide. According to recent global data, coal combustion accounts for about 33% of all electricity produced, making coal the leading individual source. Next comes natural gas, with approximately 21%. This means that over half of the planet’s electricity is still produced from fossil fuels, which emit large amounts of CO₂ and other pollutants.

Low-carbon sources are growing, but still lag behind fossil fuels worldwide: all hydroelectric plants combined generate around 14% of electricity; nuclear energy, about 9%; wind energy, around 10%; and solar photovoltaic, approximately 7%. These percentages have been rising year after year for wind and solar, but coal and gas remain dominant due to their widespread use in populous countries (such as China, India, the USA, and others). Many developed countries have reduced coal use for environmental reasons, but globally it remains at the top of the power matrix.

In summary, the most used form of generation in the world is coal-fired thermal generation — a result of its availability and historically low cost in many regions. However, a transition is underway: the share of coal and other fossil fuels has been gradually decreasing, while renewable sources gain ground driven by climate goals. The International Energy Agency (IEA) projects that, to meet climate targets, low-carbon sources (renewables and nuclear) would need to account for around 85% of global generation by 2050 — requiring an accelerated reduction in coal use in the coming years.

Source: Our World in Data.

What is the most used form of generation in Brazil?

In Brazil, hydroelectricity is by far the main form of electricity generation. Hydroelectric plants installed along rivers account, on average, for more than half of the country’s annual electricity production — reaching around 65% in years with favorable rainfall. This hydraulic dominance makes Brazil’s power matrix mostly renewable: approximately 84% of the country’s installed capacity comes from renewable sources (hydro, wind, solar, and biomass), while the global average is only 27%. In other words, in addition to hydro, Brazil has a significant share of wind, biomass, and, more recently, solar energy in its electricity mix, making it a benchmark in clean generation.

Even with the rapid expansion of wind farms and solar plants in recent years, hydroelectric plants remain the backbone of the Brazilian power system — due to their large installed capacity and ability to store water in reservoirs, providing supply stability. Fossil sources (such as natural gas and coal plants) have a smaller share in the national matrix, mainly operating as a backup during droughts or high demand periods. In summary, the most used form of generation in Brazil is hydroelectric generation, with a wide margin over other sources.

What is the most used form of generation in Europe?

Europe has a relatively clean and diversified power matrix. Considering the European Union as a whole, nuclear energy stands out as the largest individual generation source — approximately one-quarter of the bloc’s electricity has been of nuclear origin in recent years. Nuclear plants in countries such as France, Sweden, and Finland maintain this high share, making nuclear the most used form individually.

However, when grouped, renewable sources (hydro, wind, solar, biomass) already account for a larger share than any single source in Europe. In recent years, wind and solar generation have grown rapidly across many European countries, while coal use has declined due to decarbonization policies. Natural gas remains an important flexible source, accounting for about 20% to 25% of Europe’s generation, depending on the year. In short, nuclear is still the main individual source in Europe, but the region is transitioning to an increasingly renewable matrix, with wind and solar gaining share while fossil fuels lose ground.

The environmental impacts of power generation

Each type of energy generation has environmental impacts. Generally, fossil fuel sources are the most harmful to the environment due to air emissions. The burning of coal, oil, or natural gas in thermal power plants releases large amounts of greenhouse gases (mainly CO₂), contributing to global warming, as well as pollutants like sulfur dioxide (SO₂), nitrogen oxides (NOx), and particulate matter — substances that cause acid rain and respiratory problems. In contrast, renewable energy sources (wind, solar, hydro, biomass) and nuclear emit little to no CO₂ during generation. Studies show that coal- and gas-fired plants have a greenhouse gas emission factor at least ten times higher per kWh generated than clean sources like wind or solar.

Other impacts to consider include land use and water resources. Hydroelectric plants form reservoirs that flood large areas, affecting ecosystems and communities (altering habitats and displacing people). Wind farms and solar plants require large areas and may interfere with landscapes and wildlife (birds and bats can be affected), although their effects are much more localized and manageable compared to fossil thermal plants.

Nuclear plants do not pollute the air but produce radioactive waste that requires safe storage and carry the risk of severe accidents (albeit rare).

Biomass or waste-to-energy plants release air pollutants during combustion and produce ash or other residues that need proper disposal.

In summary, fossil sources cause major global and health impacts through emissions, while renewable and nuclear sources avoid these issues but may have specific local effects. The transition to clean sources is essential to cut carbon emissions from the power sector and mitigate climate change — while each project must be planned to minimize local environmental impacts.

How does Delfos support renewable energy generation companies?

With the growth of renewable sources comes the need for intelligent management of plants and farms to maximize efficiency. This is where Delfos comes in, offering artificial intelligence (AI)-based solutions to help wind, solar, and other renewable energy operators optimize their operations.

In practice, Delfos’s platform performs advanced real-time equipment monitoring and applies AI algorithms to predict failures and anomalies before they become serious issues. For example, in a wind farm, the system analyzes data from dozens of sensors on each turbine (vibration, temperature, wind speed, electrical performance, etc.) and can identify patterns indicating wear or incipient faults. With this early warning, the maintenance team can act in a planned way, avoiding unexpected shutdowns or major damage. This is called predictive maintenance, which drastically reduces wind turbine downtime and emergency corrective maintenance costs.

Beyond predictive maintenance, Delfos helps optimize performance. The platform identifies, for instance, if a wind turbine or set of solar panels is underperforming (due to dirt, misalignment, or calibration needs) and provides recommendations to correct it, increasing energy output. Delfos also integrates generation forecasting models that, by combining historical and meteorological data, can more accurately project how much energy a wind or solar plant will produce in the coming hours or days. This helps companies plan and sell energy more confidently.

Renewable generation companies using Delfos solutions can increase the efficiency and reliability of their plants. They reduce unplanned outages, maximize asset capacity, and make data-driven, intelligent decisions — instead of just relying on fixed calendars or reacting after failures. The practical results show in more energy delivered (fewer turbines/inverters offline) and lower operational costs, improving both sustainability and profitability in clean energy businesses.

Interested in learning more about power generation and the technological solutions driving the sector forward? Get in touch with the Delfos team to discover how our AI solutions can boost the performance of your renewable energy projects. Technological innovation can be the key to unlocking the full potential of wind and solar farms — and Delfos is ready to help your company lead the energy revolution with intelligence and innovation. Is your company ready to lead this energy revolution?

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