Shunt generator started with output open

A shunt generator is self-excited: its field winding is fed from its own armature voltage. It must therefore build up voltage by itself, and this is possible only when the machine is not loaded at the start.

Voltage build-up process

 residual flux -> small emf (E_r) -> small field current If
      ^                                       |
      +-- more flux, more emf  <--------------+

1. The poles keep a small residual magnetism, which gives a small emf E_r when the armature rotates.
2. This emf drives a small current I_f through the shunt field (R_sh), which strengthens the flux (if the field is connected so that it aids the residual flux).
3. More flux gives more emf and more field current, and so on, until the field resistance line meets the magnetisation curve (OCC). That point is the final no-load voltage.

Why the output terminals must be open

1. Build-up needs the field current to grow. The emf from residual flux is only a few volts. If a load is connected, most of the small armature current flows into the load instead of the field, and the I_aR_a drop and armature reaction lower the terminal voltage V = E − I_aR_a further. The field current (V/R_sh) stays too small for the flux to grow, so the voltage may never build up. (Build-up on load is possible only if the load resistance is higher than the critical load resistance.)
2. A heavy load would draw current from a very small initial emf, and the armature reaction of that current weakens the small residual flux, so the voltage fails to rise.
3. Starting on no load keeps the prime mover load light, and avoids a sudden overload on the armature and prime mover.
4. After the voltage is built up to the rated value, the load can be applied gradually.

Hence the output terminals are kept open (no load) while starting, and the load is switched on only after the voltage has built up.