Q:

What happens to a generator when we rotate it in open circuit(no load)?

What happens to a generator when we rotate it in open circuit(no load)? Let's say we have an old bicycle's dynamo without regulators, capacitors and battery. What happens if we remove the lamp and turn the wheels? Do we transform mechanical energy into electrical energy? And then what happens to this energy?  

A:

A perfect generator exhibits no mechanical resistance when electrically unloaded.  Real generators have losses due to friction, eddy currents, and magnetic core losses.  These will still be there without a load (no current).  There will therefore be some mechanical load on the shaft, and the resulting mechanical power ends up getting dissipated as heat by the generator.
If you allow output current to flow by connection a electrical load, the shaft torque goes up at the same speed.  The additional mechanical input power gets converted to electrical power and is delivered to the electrical load.

