Making Electricity Simply put, electricity is energy. And generating electricity is a process of energy conversion. Progress Energy's generation fuel mix includes coal, nuclear, natural gas/oil and hydroelectric plants. Fossil-fueled plants use oil, coal or gas in the generation of electricity (see diagram 1). Combusting, or burning, fuel creates heat (2), heat turns water to steam (3), steam turns a turbine (4), and the turbine spins the generator (5), creating electricity (6). The steam is then condensed by cool water drawn from a nearby source (such as rivers). This cooling water, which is kept inside in tubes, is returned to its source without any contamination. The steam water stays in its own closed system and is returned to the boiler to start the process again.