How does a Reactor generate energy or vaporize coolants?
With heat.
Irradiated fuel heats up, moderators absorb part of the radiation and move heat away from the Fuel Rods and toward the Casing.
The Casing Heat is what, in the end, generates energy or vaporizes coolants.
Moving heat away from the Fuel Rods is a very important aspect of your Reactor design, and moderators play a key role in it. It is also important to mention that radiation travels in every direction perpendicular to the Fuel Rods pile axis.
Please note that, while being close enough to let you create the best Reactors possible, this is an oversimplification of what's really going on inside your Reactor.