The Power Source is a mysterious device created by Inquisitor Drogan in Manufactorium Ajakis on Graia. It produces immense amounts of some mysterious energy, sufficient to run the whole Manufactorium, and in the case of an accident, crack open the whole Forge World. Drogan means it to be used to power a weapon he has developed, the Psychic Scourge.
The Power Source appears as a very small object emitting an extremely bright light, making the exact shape very difficult to see. During one brief scene when the Power Source momentarily dims it takes the form of a white cylindrical stone, much like a large stick of chalk, with dark grey veins and two engraved metal rings wrapped around the center. For transportation, it is encased in a lantern-like container about the size of a Bolt Pistol.
After Captain Titus acquires the Power Source, it can be seen hanging at his right hip
The following text contains plot spoilers.
In the process of the single-player campaign, it is revealed that the Power Source somehow produces or channels Warp energy. So much Warp energy, in fact, that ordinary humans and even normal Space Marines would be vaporized on contact. The fact that Titus can hold the Power Source in his hand with no ill effects baffles every character in the story.
Later it is revealed that Drogan, prior to his death, extracted the Power Source from inside the Warp. However, unbeknownst to him this was part of a scheme by Nemeroth. The Sorcerer Lord tracked down, killed, and reanimated Drogan, then commanded the reanimated puppet to reprogram the Psychic Scourge to open a Warp portal.
At the end of the campaign, Titus snaps the Power Source into pieces to prevent it from falling into the wrong hands yet again.