A fueled generator provides a constant supply of power. So you don't have to worry about the sun or the wind. It is useful in the early game when you can't afford renewable energy or if you can't make batteries yet. Its inventory holds 75 wood, refueled by haulers. A full fueled generator will provide power for about 3 days 9 hours. It provides heat, but less than a campfire.
As of Alpha 15 (August 28st, 2016), the fueled generator will consume fuel faster.