Arc reactor
An arc reactor is a miniature power source developed by Tony Stark.
The design is based on a large reactor built at Stark Industries, mostly as a publicity stunt. The original, larger reactor was inefficient, barely producing more power than was required to keep it running.
Stark's miniaturized version is extremely efficient. The device can be held in one hand, but can produce gigawatts of power (the Mark I was stated to have a 3 GW peak output). At high-output, however, it will use up its fuel quickly (the Mark I would only last 15 minutes at peak).
The operating principles of the reactor are not clear, although some kind of cold fusion seems likely. Palladium is known to be a component of the reactor, acting as a catalyst, but it was degraded over time by the reaction. Newer models use a vibranium catalyst, which does not degrade.
Stark has been developing a larger model to provide power for civilian use. One installed in Stark Tower in New York was said to be able to power the building by itself for a year (presumably before refueling).