The Generator is the most basic EU generating machine in IndustrialCraft2. It can be used both to supply power to IC2 machines and to recharge IC2 tools and batteries. Generators operate by being fed fuel sources, much like a vanilla Furnace. Generators are also used in crafting more advanced EU sources. REMEMBER: When first starting out, you're going to need a basic supply of fuel. The most effecient use of (early) fuel would be scaffold which only requires planks and sticks to make, so don't hesitate to gather large amounts of wood. DO NOT use coal or charcoal as a fuel for this machine, scaffold is more than twice as efficient (quantity-wise) and can be crafted without waiting for a furnace (like you have to, when making charcoal, since it must be cooked).
Any kind of fuel can be placed in the bottom slot of the Generator GUI, and it will be burned into EU. The Generator can store up to 4,000 EU in its internal battery and will deliver EU to connected Machines at a rate of 10 EU per tick (EU/t). Keep in mind, there are 20 ticks per second in Minecraft. Packet size is 10 EU (EU-P).