Question

What happens inside an electric generator?

Answer 1

@aaronq

Answer 2

Usually, magnets spin around a coil of wire, and this generates electricity.

This works due to a set of equations known as Maxwell's Equations. The one that governs this in particular:
\[\nabla X \vec{E} = -\frac{\partial B}{\partial t}\]
If you aren't familiar with this notation, that's fine. The equation means that a magnetic field that is changing in time will create an Electrical field that changes in space.

When we spin magnets around a coil of wire, we are changing the magnetic field in time. An electric field that varies over space is known as a voltage difference, which will cause electricity to flow.