Could you explain the how an AC generator works?

Simply, a generator uses the rotation of a coil of wire in a magnetic field to produce electricity. 

(The principle of electromagnetic induction/ faraday's law : Any change in the magnetic environment of a coil of wire will cause a voltage (emf) to be "induced" in the coil. )

 When a wire is moved at right angles through a magnetic field, there is a current produced in the wire.

The current is a right angles to both the motion of the wire and the magnetic field and using Fleming's right hand rule you can determine the direction of the current.  (During the tutorial I would use a whiteboard and my actual hands to illustrate this further)

When a coil of wire rotates, one side will have an upwards motion and the other will have a downwards motion. This means the induced current is flowing in opposite directions on either side of the loop, so the current is flowing around the loop. 

After every half turn, the current would switch direction (as the side moving upwards is now going down and vice versa) therefore producing an alternating current. 

Slip rings and  carbon brushes are used to ensure continuous contact between the rotating components and the stationary external circuit.