[2023] So how does mechanical power work now?

They work the same as before, but waterwheels and windmills provide very little power amount now, so you need to use a steam engine. The range of mechanical power was increased to be the same range as for electrical power :)

It will turn off, if turning it on could not provide sufficient power for what you need. And yes, we're looking into the change for green electricity producers - they also stop their animations, which is not looking very nice.

You are not supposed to use waterwheels or windmills for the assembly line, the steam engine is the intended choice. You still can do that, though, of course.