Electrical power industry

Electrical power industry

Ask a question about 'Electrical power industry'
Start a new discussion about 'Electrical power industry'
Answer questions from other users
Full Discussion Forum
The electric power industry provides the production and delivery of electric energy, often known as power, or electricity, in sufficient quantities to areas that need electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...

 through a grid connection
Grid connection
In electrical grids, a power system network integrates transmission grids, distribution grids, distributed generators and loads that have connection points called busses. A bus in home circuit breaker panels is much smaller than those used on the grid, where busbars can be 50 mm in diameter...

. The grid distributes electrical energy to customers. Electric power is generated by central power station
Power station
A power station is an industrial facility for the generation of electric energy....

s or by distributed generation
Distributed generation
Distributed generation, also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or distributed energy, generates electricity from many small energy sources....


Many households and businesses need access to electricity, especially in developed nations, the demand being scarcer in developing nations. Demand for electricity is derived from the requirement for electricity in order to operate domestic appliances, office equipment, industrial
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...

 machinery and provide sufficient energy for both domestic and commercial lighting, heating, cooking and industrial processes. Because of this aspect of the industry, it is viewed as a public utility
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...

 as infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...



The electric power industry is commonly split up into four processes. These are electricity generation
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...

 such as a power station
Power station
A power station is an industrial facility for the generation of electric energy....

, electric power transmission
Electric power transmission
Electric-power transmission is the bulk transfer of electrical energy, from generating power plants to Electrical substations located near demand centers...

, electricity distribution
Electricity distribution
File:Electricity grid simple- North America.svg|thumb|380px|right|Simplified diagram of AC electricity distribution from generation stations to consumers...

 and electricity retailing
Electricity retailing
Electricity retailing is the final process in the delivery of electricity from generation to the consumer. The other main processes are transmission and distribution.- Beginnings :...

. In many countries, electric power companies own the whole infrastructure from generating stations to transmission and distribution infrastructure. For this reason, electric power is viewed as a natural monopoly
Natural monopoly
A monopoly describes a situation where all sales in a market are undertaken by a single firm. A natural monopoly by contrast is a condition on the cost-technology of an industry whereby it is most efficient for production to be concentrated in a single form...

. The industry is generally heavily regulated
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...

, often with price controls and is frequently government-owned and operated
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...


The nature and state of market reform of the electricity market
Electricity market
In economic terms, electricity is a commodity capable of being bought, sold and traded. An electricity market is a system for effecting purchases, through bids to buy; sales, through offers to sell; and short-term trades, generally in the form of financial or obligation swaps. Bids and offers use...

 often determines whether electric companies are able to be involved in just some of these processes without having to own the entire infrastructure, or citizens choose which components of infrastructure to patronise. In countries where electricity provision is deregulated, end-users of electricity may opt for more costly green electricity.


All forms of electricity generation have positive and negative aspects. Technology
Technology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...

 will probably eventually declare the most preferred forms, but in a market economy
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...

, the options with less overall costs generally will be chosen above other sources. It is not clear yet which form can best meet the necessary energy demands or which process can best solve the demand for electricity. There are indications that renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...

 and distributed generation
Distributed generation
Distributed generation, also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or distributed energy, generates electricity from many small energy sources....

 are becoming more viable in economic terms. A diverse mix of generation sources reduces the risks of electricity price spikes.


Although electricity had been known to be produced as a result of the chemical reactions that take place in an electrolytic cell
Electrolytic cell
An electrolytic cell decomposes chemical compounds by means of electrical energy, in a process called electrolysis; the Greek word lysis means to break up. The result is that the chemical energy is increased...

 since Alessandro Volta
Alessandro Volta
Count Alessandro Giuseppe Antonio Anastasio Gerolamo Umberto Volta was a Lombard physicist known especially for the invention of the battery in 1800.-Early life and works:...

 developed the voltaic pile
Voltaic pile
A voltaic pile is a set of individual Galvanic cells placed in series. The voltaic pile, invented by Alessandro Volta in 1800, was the first electric battery...

 in 1800, its production by this means was, and still is, expensive. In 1831, Michael Faraday
Michael Faraday
Michael Faraday, FRS was an English chemist and physicist who contributed to the fields of electromagnetism and electrochemistry....

 devised a machine that generated electricity from rotary motion, but it took almost 50 years for the technology to reach a commercially viable stage. In 1878, in the US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, Thomas Edison
Thomas Edison
Thomas Alva Edison was an American inventor and businessman. He developed many devices that greatly influenced life around the world, including the phonograph, the motion picture camera, and a long-lasting, practical electric light bulb. In addition, he created the world’s first industrial...

 developed and sold a commercially viable replacement for gas lighting and heating using locally generated and distributed direct current
Direct current
Direct current is the unidirectional flow of electric charge. Direct current is produced by such sources as batteries, thermocouples, solar cells, and commutator-type electric machines of the dynamo type. Direct current may flow in a conductor such as a wire, but can also flow through...


The world's first public electricity supply was provided in late 1881, when the streets of the Surrey
Surrey is a county in the South East of England and is one of the Home Counties. The county borders Greater London, Kent, East Sussex, West Sussex, Hampshire and Berkshire. The historic county town is Guildford. Surrey County Council sits at Kingston upon Thames, although this has been part of...

 town of Godalming
Godalming is a town and civil parish in the Waverley district of the county of Surrey, England, south of Guildford. It is built on the banks of the River Wey and is a prosperous part of the London commuter belt. Godalming shares a three-way twinning arrangement with the towns of Joigny in France...

 in the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

 were lit with electric light. This system was powered from a water wheel on the River Wey
River Wey
The River Wey in Surrey, Hampshire and West Sussex is a tributary of the River Thames with two separate branches which join at Tilford. The source of the north branch is at Alton, Hampshire and of the south branch at both Blackdown south of Haslemere, and also close to Gibbet Hill, near Hindhead...

, which drove a Siemens alternator
An alternator is an electromechanical device that converts mechanical energy to electrical energy in the form of alternating current.Most alternators use a rotating magnetic field but linear alternators are occasionally used...

 that supplied a number of arc lamps within the town. This supply scheme also provided electricity to a number of shops and premises.

Coinciding with this, in early 1882, Edison opened the world’s first steam-powered electricity generating station at Holborn Viaduct
Holborn Viaduct
Holborn Viaduct is a bridge in London and the name of the street which crosses it . It links Holborn, via Holborn Circus, with Newgate Street in the City of London, passing over Farringdon Street and the now subterranean River Fleet.It was built between 1863 and 1869, at a cost of over two million...

 in London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

, where he had entered into an agreement with the City Corporation for a period of three months to provide street lighting. In time he had supplied a number of local consumers with electric light. The method of supply was direct current (DC).

It was later on in the year in September 1882 that Edison opened the Pearl Street Power Station in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

 and again it was a DC supply. It was for this reason that the generation was close to or on the consumer's premises as Edison had no means of voltage conversion. The voltage chosen for any electrical system is a compromise. Increasing the voltage
Voltage, otherwise known as electrical potential difference or electric tension is the difference in electric potential between two points — or the difference in electric potential energy per unit charge between two points...

 reduces the current and therefore reduces resistive losses in the cable. Unfortunately it increases the danger from direct contact
Electric shock
Electric Shock of a body with any source of electricity that causes a sufficient current through the skin, muscles or hair. Typically, the expression is used to denote an unwanted exposure to electricity, hence the effects are considered undesirable....

 and also increases the required insulation
Electrical insulation
thumb|250px|[[Coaxial Cable]] with dielectric insulator supporting a central coreThis article refers to electrical insulation. For insulation of heat, see Thermal insulation...

 thickness. Furthermore some load types were difficult or impossible to make for higher voltages.

Additionally, Robert Hammond, in December 1881, demonstrated the new electric light in the Sussex
Sussex , from the Old English Sūþsēaxe , is an historic county in South East England corresponding roughly in area to the ancient Kingdom of Sussex. It is bounded on the north by Surrey, east by Kent, south by the English Channel, and west by Hampshire, and is divided for local government into West...

 town of Brighton
Brighton is the major part of the city of Brighton and Hove in East Sussex, England on the south coast of Great Britain...

 in the UK for a trial period. The ensuing success of this installation enabled Hammond to put this venture on both a commercial and legal footing, as a number of shop owners wanted to use the new electric light. Thus the Hammond Electricity Supply Co. was launched. Whilst the Godalming and Holborn Viaduct Schemes closed after a few years the Brighton Scheme continued on, and supply was in 1887 made available for 24 hours per day.

Nikola Tesla
Nikola Tesla
Nikola Tesla was a Serbian-American inventor, mechanical engineer, and electrical engineer...

, who had worked for Edison for a short time and appreciated the electrical theory in a way that Edison did not, devised an alternative system using alternating current
Alternating current
In alternating current the movement of electric charge periodically reverses direction. In direct current , the flow of electric charge is only in one direction....

. Tesla realised that while doubling the voltage would halve the current and reduce losses by three-quarters, only an alternating current system allowed the transformation
A transformer is a device that transfers electrical energy from one circuit to another through inductively coupled conductors—the transformer's coils. A varying current in the first or primary winding creates a varying magnetic flux in the transformer's core and thus a varying magnetic field...

 between voltage levels in different parts of the system. This allowed efficient high voltages for distribution where their risks could easily be mitigated by good design while still allowing fairly safe voltages to be supplied to the loads. He went on to develop the overall theory of his system, devising theoretical and practical alternatives for all of the direct current appliances then in use, and patented his novel ideas in 1887, in thirty separate patents.

In 1888, Tesla's work came to the attention of George Westinghouse
George Westinghouse
George Westinghouse, Jr was an American entrepreneur and engineer who invented the railway air brake and was a pioneer of the electrical industry. Westinghouse was one of Thomas Edison's main rivals in the early implementation of the American electricity system...

, who owned a patent for a type of transformer that could deal with high power and was easy to make. Westinghouse had been operating an alternating current lighting plant in Great Barrington, Massachusetts
Great Barrington, Massachusetts
Great Barrington is a town in Berkshire County, Massachusetts, United States. It is part of the Pittsfield, Massachusetts Metropolitan Statistical Area. The population was 7,104 at the 2010 census. Both a summer resort and home to Ski Butternut, Great Barrington includes the villages of Van...

 since 1886. While Westinghouse's system could use Edison's lights and had heaters, it did not have a motor. With Tesla and his patents, Westinghouse built a power system for a gold mine in Telluride, Colorado
Telluride, Colorado
The town of Telluride is the county seat and most populous town of San Miguel County in the southwestern portion of the U.S. state of Colorado. The town is a former silver mining camp on the San Miguel River in the western San Juan Mountains...

 in 1891, with a water driven 100 horsepower
Horsepower is the name of several units of measurement of power. The most common definitions equal between 735.5 and 750 watts.Horsepower was originally defined to compare the output of steam engines with the power of draft horses in continuous operation. The unit was widely adopted to measure the...

 (75 kW) generator powering a 100 horsepower (75 kW) motor over a 2.5-mile (4 km) power line
Electric power transmission
Electric-power transmission is the bulk transfer of electrical energy, from generating power plants to Electrical substations located near demand centers...

. Almarian Decker
Almarian Decker
Almarian William Decker was an American pioneer of electrical engineering involved in the early development of three-phase electrical power. In 1892 he was hired by H. H...

 finally invented the whole system of three-phase power generating in Redlands, California in 1893. Then, in a deal with General Electric
General Electric
General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...

, which Edison had been forced to sell, Westinghouse's company went on to construct the Adams Power Plant at the Niagara Falls
Niagara Falls
The Niagara Falls, located on the Niagara River draining Lake Erie into Lake Ontario, is the collective name for the Horseshoe Falls and the adjacent American Falls along with the comparatively small Bridal Veil Falls, which combined form the highest flow rate of any waterfalls in the world and has...

, with three 5,000 horsepower (3.7 MW) Tesla generators supplying electricity to an aluminium
Aluminium or aluminum is a silvery white member of the boron group of chemical elements. It has the symbol Al, and its atomic number is 13. It is not soluble in water under normal circumstances....

 smelter at Niagara
Niagara, New York
Niagara is a town in Niagara County, New York, United States. As of the 2010 census, the town had a total population of 8,378. The town is named after the famous waterfall Niagara Falls....

 and the town of Buffalo
Buffalo, New York
Buffalo is the second most populous city in the state of New York, after New York City. Located in Western New York on the eastern shores of Lake Erie and at the head of the Niagara River across from Fort Erie, Ontario, Buffalo is the seat of Erie County and the principal city of the...

 22 miles (35 km) away. The Niagara power station commenced operation on April 20, 1895.

Tesla's alternating current system remains the primary means of delivering electrical energy to consumers throughout the world. While high-voltage direct current
High-voltage direct current
A high-voltage, direct current electric power transmission system uses direct current for the bulk transmission of electrical power, in contrast with the more common alternating current systems. For long-distance transmission, HVDC systems may be less expensive and suffer lower electrical losses...

 (HVDC) is increasingly being used to transmit large quantities of electricity over long distances or to connect adjacent asynchronous power systems, the bulk of electricity generation, transmission, distribution and retailing takes place using alternating current.

Market reform

There has been a movement towards separating the monopoly parts of the industry, such as transmission and distribution sectors from the contestable sectors of generation and retailing across the world. This has occurred prominently since the reform of the electricity supply industry in England and Wales in 1990. In some countries, wholesale electricity markets operate, with generators
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...

 and retailers
Electricity retailing
Electricity retailing is the final process in the delivery of electricity from generation to the consumer. The other main processes are transmission and distribution.- Beginnings :...

 trading electricity in a similar manner to share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...

s and currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...


External links