The Lava Generator is a Quest you unlock at Level 24 at Magma Crater.

The Generator is now ready to be activated. Head to the far reaches of Magma Crater and activate the lava generator by stepping next to it. This is the final generator that will allow us to finally rebuild Castaway.
Activate the Lava Generator
1000 Experience

After you finish this quest, Malaki says: "Thank you so much for helping us rebuild our town! Please feel free to stay here as long as you want. Maybe someday we will even find a way for you to return home."