ElectricalAn electric utility is an electric power company (often a public utility) that engages in the generation, transmission, and distribution of electricity for sale generally in a regulated market. The electrical utility industry is a major provider of energy in most countries. It is indispensable to factories, commercial establishments, homes, and even most recreational facilities. Lack of electricity causes not only inconvenience, but also economic loss due to reduced industrial production.

Electric utilities include investor owned, publicly owned, cooperatives, and nationalized entities. They may be engaged in all or only some aspects of the industry. Electricity markets are also considered electric utilities--these entities buy and sell electricity, acting as brokers, but usually do not own or operate generation, transmission, or distribution facilities. Utilities are regulated by local and national authorities.


Utility service territories are typically geographically distinct from one another. These territories may be set by regulation or by economics as the capital cost of reproducing infrastructure is usually prohibitive. Each territory is composed of different types of consumers, usually broadly described as either commercial, residential or industrial.

Tariff structure

Electricity consumers are divided into classes of service or sectors (residential, commercial, industrial, and other) based on the type of service they receive. Sectoral classification of consumers is determined by each utility and is based on various criteria such as:

  • demand levels
  • rate schedules
  • distribution voltage
  • accounting methods
  • end-use applications
  • other social and economic characteristics

Utilities typically employ a number of tariffs. The alternative tariffs reflect consumers' varying consumption levels and patterns and the associated impact on the utility's costs of providing the service.

Power transactions

An electric power system is a group of generation, transmission, distribution, communication, and other facilities that are physically connected. The flow of electricity with the system is maintained and controlled by dispatch centers. It is the responsibility of the dispatch center to match the supply of electricity with the demand. In order to carry out its responsibilities, the dispatch center is authorized to buy and sell electricity based on system requirements. The interconnected utilities within each power grid coordinate operations and may buy and sell power among themselves. The bulk power system makes it possible for utilities to engage in wholesale (for resale) electric power trade. Wholesale trade has historically played an important role, allowing utilities to reduce power costs, increase power supply options, and improve reliability. Authority for those transactions has been pre-approved under interconnection agreements signed by all the electric utilities physically interconnected or with coordination agreements among utilities that are not connected.

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. Most countries generate electricity in large centralized facilities, such as fossil fuel (coal, gas powered), nuclear, large solar power plants or hydropower plants. These plants have excellent economies of scale, but usually transmit electricity long distances and negatively affect the environment. Distributed generation allows collection of energy from many sources and may give lower environmental impacts and improved security of supply.

Economies of scale

Historically, central plants have been an integral part of the electric grid, in which large generating facilities are specifically located either close to resources or otherwise located far from populated load centers. These, in turn, supply the traditional transmission and distribution grid which distributes bulk power to load centers and from there to consumers. These were developed when the costs of transporting fuel and integrating generating technologies into populated areas far exceeded the cost of developing T&D facilities and tariffs. Central plants are usually designed to take advantage of available economies of scale in a site-specific manner, and are built as "one-off," custom projects.

These economies of scale began to fail in the late 1960s and, by the start of the 21st century, Central Plants could arguably no longer deliver competitively cheap and reliable electricity to more remote customers through the grid, because the plants had come to cost less than the grid and had become so reliable that nearly all power failures originated in the grid. Thus, the grid had become the main driver of remote customers’ power costs and power quality problems, which became more acute as digital equipment required extremely reliable electricity.,[1][2] Efficiency gains no longer come from increasing generating capacity, but from smaller units located closer to sites of demand.

For example, coal power plants are built away from cities to prevent their heavy air pollution from affecting the populace. In addition, such plants are often built near collieries to minimize the cost of transporting coal. Hydroelectric plants are by their nature limited to operating at sites with sufficient water flow. Most fuelled power plants are too far away for their waste heat to be economically used for heating buildings.

Low pollution is a crucial advantage of combined cycle plants that burn natural gas. The low pollution permits the plants to be near enough to a city to be used for district heating and cooling.

Distributed generation

Distributed generation plants are mass-produced, small, and less site-specific. Their development arose out of:

  1. concerns over perceived externalized costs of central plant generation, particularly environmental concerns,
  2. the increasing age, deterioration, and capacity constraints upon T&D for bulk power,
  3. the increasing relative economy of mass production of smaller appliances over heavy manufacturing of larger units and on-site construction, and
  4. Along with higher relative prices for energy, higher overall complexity and total costs for regulatory oversight, tariff administration, and metering and billing.


Capital markets have come to realize that right-sized resources, for individual customers, distribution substations, or microgrids, are able to offer important but little-known economic advantages over Central Plants. Smaller units offered greater economies from mass-production than big ones could gain through unit size. These increased value—due to improvements in financial risk, engineering flexibility, security, and environmental quality—of these resources can often more than offset their apparent cost disadvantages. DG, vis-à-vis Central Plants, must be justified on a life-cycle basis. Unfortunately, many of the direct, and virtually all of the indirect, benefits of DG are not captured within traditional utility cash-flow accounting.

While the levelized generation cost of distrbuted generation is more expensive than conventional sources on a kWh basis, this does not include a complete accounting for the negative externalities associated with conventional fuels. The additional premium for DG is rapidly declining as demand increases and technology progresses, and sufficient and reliable demand will bring economies of scale, innovation, competition, and more flexible financing, that will make DG clean energy part of a more diversified future.

Distributed generation reduces the amount of energy lost in transmitting electricity because the electricity is generated very near where it is used, perhaps even in the same building. This also reduces the size and number of power lines that must be constructed.

Typical distributed power sources in a Feed-in Tariff (FIT) scheme have low maintenance, low pollution and high efficiencies. In the past, these traits required dedicated operating engineers and large complex plants to reduce pollution. However, modern embedded systems can provide these traits with automated operation and renewables, such as sunlight, wind and geothermal. This reduces the size of power plant that can show a profit

Types of distributed energy resources

Distributed energy resource (DER) systems are small-scale power generation technologies (typically in the range of 3 kW to 10,000 kW) used to provide an alternative to or an enhancement of the traditional electric power system. The usual problem with distributed generators are their high costs.

One popular source is solar panels on the roofs of buildings. The production cost is $0.99 to 2.00/W (2007) plus installation and supporting equipment unless the installation is Do it yourself (DIY) bringing the cost to $5.25 to 7.50 (2010).[8] This is comparable to coal power plant costs of $0.582 to 0.906/W (1979),[9][10] adjusting for inflation. Nuclear power is higher at $2.2 to $6.00/W (2007).[11] Some "thin-film" solar cells have waste disposal issues when they are made with heavy metals such as Cadmium telluride (CdTe) and Copper indium gallium selenide (CuInGaSe), and need to be recycled, as opposed to silicon solar cells which are mostly non-metallic. Unlike coal and nuclear, there are no fuel costs, pollution, mining safety or operating safety issues. Solar power has a low capacity factor, producing peak power at local noon each day. Average capacity factor is typically 20%.

Another source is small wind turbines. These have low maintenance, and low pollution. Construction costs are higher ($0.80/W, 2007) per watt than large power plants, except in very windy areas. Wind towers and generators have substantial insurable liabilities caused by high winds, but good operating safety. In some areas of the US there may also be Property Tax costs involved with wind turbines that are not offset by incentives or accelerated depreciation. Wind also tends to be complementary to solar; on days there is no sun there tends to be wind and vice versa. Many distributed generation sites combine wind power and solar power such as Slippery Rock University, which can be monitored online.

In addition, molten carbonate and solid oxide fuel cells using natural gas, such as the Fuel Cell Energy Co, VERSA power Co. and Bloom Energy Server, have recently become a distributed energy resource.

Distributed cogeneration sources use natural gas-fired microturbines or reciprocating engines to turn generators. The hot exhaust is then used for space or water heating, or to drive an absorptive chiller  for air-conditioning. The clean fuel has only low pollution. Designs currently have uneven reliability, with some makes having excellent maintenance costs, and others being unacceptable.

Integration with the grid

For reasons of reliability, distributed generation resources would be interconnected to the same transmission grid as central stations. Various technical and economic issues occur in the integration of these resources into a grid. Technical problems arise in the areas of power quality, voltage stability, harmonics, reliability, protection, and control. Behavior of protective devices on the grid must be examined for all combinations of distributed and central station generation. A large scale deployment of distributed generation may affect grid-wide functions such as frequency control and allocation of reserves.

Cost factors

Cogenerators are also more expensive per watt than central generators. They find favor because most buildings already burn fuels, and the cogeneration can extract more value from the fuel.

Some larger installations utilize combined cycle generation. Usually this consists of a gas turbine whose exhaust boils water for a steam turbine in a Rankine cycle. The condenser of the steam cycle provides the heat for space heating or an absorptive chiller. Combined cycle plants with cogeneration have the highest known thermal efficiencies, often exceeding 85%.

In countries with high pressure gas distribution, small turbines can be used to bring the gas pressure to domestic levels whilst extracting useful energy. If the UK were to implement this countrywide an additional 2-4 GWe would become available. (Note that the energy is already being generated elsewhere to provide the high initial gas pressure - this method simply distributes the energy via a different route.)

Future generations of electric vehicles will have the ability to deliver power from the battery into the grid when needed. An electric vehicle network could also be an important distributed generation resource.

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. His basic method is still used today: electricity is generated by the movement of a loop of wire, or disc of copper between the poles of a magnet.[1]


For electric utilities, it is the first process in the delivery of electricity to consumers. The other processes, electricity transmission, distribution, and electrical power storage and recovery using pumped-storage methods are normally carried out by the electric power industry.

Electricity is most often generated at a power station by electromechanical generators, primarily driven by heat engines fueled by chemical combustion or nuclear fission but also by other means such as the kinetic energy of flowing water and wind. There are many other technologies that can be and are used to generate electricity such as solar photovoltaics and geothermal power.

Sources of electricity in the U.S. in 2009[1] fossil fuel generation (mainly coal) was the largest source.

Sources of electricity in France in 2006;[2] nuclear power was the main source.



Central power stations became economically practical with the development of alternating current power transmission, using power transformers to transmit power at high voltage and with low loss. Electricity has been generated at central stations since 1881. The first power plants were run on water power] or coal, and today we rely mainly on coal, nuclear, natural gas, hydroelectric, and petroleum with a small amount from solar energy, tidal harnesses, wind generators, and geothermal sources.

Methods of generating electricity

There are seven fundamental methods of directly transforming other forms of energy into electrical energy:

Static electricity was the first form discovered and investigated, and the electrostatic generator is still used even in modern devices such as the Van de Graaff generator and MHD generators. Charge carriers are separated and physically transported to a position of increased electric potential.

Almost all commercial electrical generation is done using electromagnetic induction, in which mechanical energy forces an electrical generator to rotate. There are many different methods of developing the mechanical energy, including heat engines, hydro, wind and tidal power.

The direct conversion of nuclear potential energy to electricity by beta decay is used only on a small scale. In a full-size nuclear power plant, the heat of a nuclear reaction is used to run a heat engine. This drives a generator, which converts mechanical energy into electricity by magnetic induction.

Most electric generation is driven by heat engines. The combustion of fossil fuels supplies most of the heat to these engines, with a significant fraction from nuclear fission and some from renewable sources. The modern steam turbine (invented by Sir Charles Parsons in 1884) currently generates about 80 percent of the electric power in the world using a variety of heat sources.


Large dams such as Three Gorges Dam in China can provide large amounts of hydroelectric power; it will have a 22.5 GW capability.

All turbines are driven by a fluid acting as an intermediate energy carrier. Many of the heat engines just mentioned are turbines. Other types of turbines can be driven by wind or falling water.

  • Steam - Water is boiled by:
    • Nuclear fission,
    • The burning of fossil fuels (coal, natural gas, or petroleum). In hot gas (gas turbine), turbines are driven directly by gases produced by the combustion of natural gas or oil. Combined cycle gas turbine plants are driven by both steam and natural gas. They generate power by burning natural gas in a gas turbine and use residual heat to generate additional electricity from steam. These plants offer efficiencies of up to 60%.
    • Renewables. The steam generated by:
  • Other renewable sources:


Large dams such as Hoover Dam can provide large amounts of hydroelectric power; it has 2.07 GW capability.

    • Water (hydroelectric) - Turbine blades are acted upon by flowing water, produced by hydroelectric dams or tidal forces.
    • Wind - Most wind turbines generate electricity from naturally occurring wind. Solar updraft towers use wind that is artificially produced inside the chimney by heating it with sunlight, and are more properly seen as forms of solar thermal energy.


Reciprocating engines

Small electricity generators are often powered by reciprocating engines burning diesel, biogas or natural gas. Diesel engines are often used for back up generation, usually at low voltages. However most large power grids also use diesel generators, originally provided as emergency back up for a specific facility such as a hospital, to feed power into the grid during certain circumstances. Biogas is often combusted where it is produced, such as a landfill or wastewater treatment plant, with a reciprocating engine or a microturbine, which is a small gas turbine.

Photovoltaic panels

Unlike the solar heat concentrators mentioned above, photovoltaic panels convert sunlight directly to electricity. Although sunlight is free and abundant, solar electricity is still usually more expensive to produce than large-scale mechanically generated power due to the cost of the panels. Low-efficiency silicon solar cells have been decreasing in cost and multijunction cells with close to 30% conversion efficiency are now commercially available. Over 40% efficiency has been demonstrated in experimental systems. Until recently, photovoltaics were most commonly used in remote sites where there is no access to a commercial power grid, or as a supplemental electricity source for individual homes and businesses. Recent advances in manufacturing efficiency and photovoltaic technology, combined with subsidies driven by environmental concerns, have dramatically accelerated the deployment of solar panels. Installed capacity is growing by 40% per year led by increases in Germany, Japan, California and New Jersey.

Other generation methods

Wind-powered turbines usually provide electrical generation in conjunction with other methods of producing power.

Various other technologies have been studied and developed for power generation. Solid-state generation (without moving parts) is of particular interest in portable applications. This area is largely dominated by thermoelectric (TE) devices, though thermionic (TI) and thermophotovoltaic (TPV) systems have been developed as well. Typically, TE devices are used at lower temperatures than TI and TPV systems. Piezoelectric devices are used for power generation from mechanical strain, particularly in power harvesting. Betavoltaics are another type of solid-state power generator which produces electricity from radioactive decay. Fluid-based magnetohydrodynamic (MHD) power generation has been studied as a method for extracting electrical power from nuclear reactors and also from more conventional fuel combustion systems. Osmotic power finally is another possibility at places where salt and sweet water merges (e.g. deltas, ...)

Electrochemical electricity generation is also important in portable and mobile applications. Currently, most electrochemical power comes from closed electrochemical cells ("batteries"),[9] which are arguably utilized more as storage systems than generation systems, but open electrochemical systems, known as fuel cells, have been undergoing a great deal of research and development in the last few years. Fuel cells can be used to extract power either from natural fuels or from synthesized fuels (mainly electrolytic hydrogen) and so can be viewed as either generation systems or storage systems depending on their use.

Electric power transmission

Electric-power transmission is the bulk transfer of electrical energy, from generating power plants to electrical substations located near demand centers. This is distinct from the local wiring between high-voltage substations and customers, which is typically referred to as electric power distribution. Transmission lines, when interconnected with each other, become transmission networks. In the US, these are typically referred to as "power grids" or just "the grid." In the UK, the network is known as the "National Grid." North America has three major grids, the Western Interconnection, the Eastern Interconnection and the Electric Reliability Council of Texas (ERCOT) grid, often referred to as the Western System, the Eastern System and the Texas System.

Historically, transmission and distribution lines were owned by the same company, but starting in the 1990s, many countries have liberalized the regulation of the electricity market in ways that have led to the separation of the electricity transmission business from the distribution business.

Most transmission lines use high-voltage three-phase alternating current (AC), although single phase AC is sometimes used in railway electrification systems. High-voltage direct-current (HVDC) technology is used for greater efficiency in very long distances (typically hundreds of miles (kilometres), or in submarine power cables (typically longer than 30 miles (50 km). HVDC links are also used to stabilize against control problems in large power distribution networks where sudden new loads or blackouts in one part of a network can otherwise result in synchronization problems and cascading failures.

Electricity is transmitted at high voltages (110 kV or above) to reduce the energy lost in long-distance transmission. Power is usually transmitted through overhead power lines. Underground power transmission has a significantly higher cost and greater operational limitations but is sometimes used in urban areas or sensitive locations.

A key limitation in the distribution of electric power is that, with minor exceptions, electrical energy cannot be stored, and therefore must be generated as needed. A sophisticated control system is required to ensure electric generation very closely matches the demand. If the demand for power exceeds the supply, generation plants and transmission equipment can shut down which, in the worst cases, can lead to a major regional blackout, such as occurred in the US Northeast blackouts of 1965, 1977, 2003, and in 1996 and 2011. To reduce the risk of such failures, electric transmission networks are interconnected into regional, national or continental wide networks thereby providing multiple redundant alternative routes for power to flow should (weather or equipment) failures occur. Much analysis is done by transmission companies to determine the maximum reliable capacity of each line (ordinarily less than its physical or thermal limit) to ensure spare capacity is available should there be any such failure in another part of the network.

Overhead transmission

Contiguous United States power transmission grid consists of 300,000 km of lines operated by 500 companies.

High-voltage overhead conductors are not covered by insulation. The conductor material is nearly always an aluminium alloy, made into several strands and possibly reinforced with steel strands. Copper was sometimes used for overhead transmission but aluminium is lighter, yields only marginally reduced performance, and costs much less. Overhead conductors are a commodity supplied by several companies worldwide. Improved conductor material and shapes are regularly used to allow increased capacity and modernize transmission circuits. Conductor sizes range from 12 mm2 (#6 American wire gauge) to 750 mm2 (1,590,000 circular mils area), with varying resistance and current-carrying capacity. Thicker wires would lead to a relatively small increase in capacity due to the skin effect, that causes most of the current to flow close to the surface of the wire. Because of this current limitation, multiple parallel cables (called bundle conductors) are used when higher capacity is needed. Bundle conductors are also used at high voltages to reduce energy loss caused by corona discharge.

Today, transmission-level voltages are usually considered to be 110 kV and above. Lower voltages such as 66 kV and 33 kV are usually considered subtransmission voltages but are occasionally used on long lines with light loads. Voltages less than 33 kV are usually used for distribution. Voltages above 230 kV are considered extra high voltage and require different designs compared to equipment used at lower voltages.

Since overhead transmission wires depend on air for insulation, design of these lines requires minimum clearances to be observed to maintain safety. Adverse weather conditions of high wind and low temperatures can lead to power outages. Wind speeds as low as 23 knots (43 km/h) can permit conductors to encroach operating clearances, resulting in a flashover and loss of supply. Oscillatory motion of the physical line can be termed gallop or flutter depending on the frequency and amplitude of oscillation.

Underground transmission

Electric power can also be transmitted by underground power cables instead of overhead power lines. Underground cables take up less right-of-way than overhead lines, have lower visibility, and are less affected by bad weather. However, costs of insulated cable and excavation are much higher than overhead construction. Faults in buried transmission lines take longer to locate and repair. Underground lines are strictly limited by their thermal capacity, which permits less overload or re-rating than overhead lines. Long underground cables have significant capacitance, which may reduce their ability to provide useful power to loads.


New York City streets in 1890. Besides telegraph lines, multiple electric lines were required for each class of device requiring different voltages.

In the early days of commercial electric power, transmission of electric power at the same voltage as used by lighting and mechanical loads restricted the distance between generating plant and consumers. In 1882, generation was with direct current (DC), which could not easily be increased in voltage for long-distance transmission. Different classes of loads (for example, lighting, fixed motors, and traction/railway systems) required different voltages, and so used different generators and circuits.[3][page needed]

Due to this specialization of lines and because transmission was inefficient for low-voltage high-current circuits, generators needed to be near their loads. It seemed at the time, that the industry would develop into what is now known as a distributed generation system with large numbers of small generators located near their loads.[4]


In 1886, in Great Barrington, Massachusetts, a 1 kV alternating current (AC) distribution system was installed. That same year, AC power at 2 kV, transmitted 30 km, was installed at Cerchi, Italy. At an AIEE meeting on May 16, 1888, Nikola Tesla delivered a lecture entitled A New System of Alternating Current Motors and Transformers, describing the equipment which allowed efficient generation and use of polyphase alternating currents. The transformer, and Tesla's polyphase and single-phase induction motors, were essential for a combined AC distribution system for both lighting and machinery. Ownership of the rights to the Tesla patents was a key advantage to the Westinghouse Company in offering a complete alternating current power system for both lighting and power.

Nikola Tesla's Alternating current polyphase generators on display at the 1893 World's Fair in Chicago. Tesla's polyphase innovations revolutionized transmission.

Regarded as one of the most influential electrical innovations, the universal system used transformers to step-up voltage from generators to high-voltage transmission lines, and then to step-down voltage to local distribution circuits or industrial customers. By a suitable choice of utility frequency, both lighting and motor loads could be served. Rotary converters and later mercury-arc valves and other rectifier equipment allowed DC to be provided where needed. Generating stations and loads using different frequencies could be interconnected using rotary converters. By using common generating plants for every type of load, important economies of scale were achieved, lower overall capital investment was required, load factor on each plant was increased allowing for higher efficiency, a lower cost for the consumer and increased overall use of electric power.

By allowing multiple generating plants to be interconnected over a wide area, electricity production cost was reduced. The most efficient available plants could be used to supply the varying loads during the day. Reliability was improved and capital investment cost was reduced, since stand-by generating capacity could be shared over many more customers and a wider geographic area. Remote and low-cost sources of energy, such as hydroelectric power or mine-mouth coal, could be exploited to lower energy production cost.[3]


The first transmission of three-phase alternating current using high voltage took place in 1891 during the international electricity exhibition in Frankfurt. A 25 kV transmission line, approximately 175 km long, connected Lauffen on the Neckar and Frankfurt.

Voltages used for electric power transmission increased throughout the 20th century. By 1914, fifty-five transmission systems each operating at more than 70 kV were in service. The highest voltage then used was 150 kV.[5]

The rapid industrialization in the 20th century made electrical transmission lines and grids a critical part of the infrastructure in most industrialized nations. Interconnection of local generation plants and small distribution networks was greatly spurred by the requirements of World War I, with large electrical generating plants built by governments to provide power to munitions factories. Later these generating plants were connected to supply civil loads through long-distance transmission.[6]


Bulk power transmission

A transmission substation decreases the voltage of incoming electricity, allowing it to connect from long distance high voltage transmission, to local lower voltage distribution. It also reroutes power to other transmission lines that serve local markets.

Engineers design transmission networks to transport the energy as efficiently as feasible, while at the same time taking into account economic factors, network safety and redundancy. These networks use components such as power lines, cables, circuit breakers, switches and transformers. The transmission network is usually administered on a regional basis by an entity such as a regional transmission organization or transmission system operator.

Transmission efficiency is hugely improved by devices that increase the voltage, and proportionately reduce the current in the conductors, thus keeping the power transmitted nearly equal to the power input. The reduced current flowing through the line reduces the losses in the conductors. According to Joule's Law, energy losses are directly proportional to the square of the current. Thus, reducing the current by a factor of 2 will lower the energy lost to conductor resistance by a factor of 4.

This change in voltage is usually achieved in AC circuits using a step-up transformer. HVDC systems require relatively costly conversion equipment which may be economically justified for particular projects, but are less common currently.

A transmission grid is a network of power stations, transmission lines, and substations. Energy is usually transmitted within a grid with three-phase AC. Single-phase AC is used only for distribution to end users since it is not usable for large polyphase induction motors. In the 19th century, two-phase transmission was used but required either four wires or three wires with unequal currents. Higher order phase systems require more than three wires, but deliver marginal benefits.

The capital cost of electric power stations is so high, and electric demand is so variable, that it is often cheaper to import some portion of the needed power than to generate it locally. Because nearby loads are often correlated (hot weather in the Southwest portion of the US might cause many people to use air conditioners), electricity often comes from distant sources. Because of the economics of load balancing, wide area transmission grids now span across countries and even large portions of continents. The web of interconnections between power producers and consumers ensures that power can flow, even if a few links are inoperative.

The unvarying (or slowly varying over many hours) portion of the electric demand is known as the base load and is generally served best by large facilities (which are therefore efficient due to economies of scale) with low variable costs for fuel and operations. Such facilities might be nuclear or coal-fired power stations, or hydroelectric, while other renewable energy sources such as concentrated solar thermal and geothermal power have the potential to provide base load power. Renewable energy sources such as solar photovoltaics, wind, wave, and tidal are, due to their intermittency, not considered "base load" but can still add power to the grid. The remaining power demand, if any, is supplied by peaking power plants, which are typically smaller, faster-responding, and higher cost sources, such as combined cycle or combustion turbine plants fueled by natural gas.

Long-distance transmission of electricity (thousands of kilometers) is cheap and efficient, with costs of US$0.005–0.02/kWh (compared to annual averaged large producer costs of US$0.01–0.025/kWh, retail rates upwards of US$0.10/kWh, and multiples of retail for instantaneous suppliers at unpredicted highest demand moments).[7] Thus distant suppliers can be cheaper than local sources (e.g., New York City buys a lot of electricity from Canada). Multiple local sources (even if more expensive and infrequently used) can make the transmission grid more fault tolerant to weather and other disasters that can disconnect distant suppliers.

Long distance transmission allows remote renewable energy resources to be used to displace fossil fuel consumption. Hydro and wind sources cannot be moved closer to populous cities, and solar costs are lowest in remote areas where local power needs are minimal. Connection costs alone can determine whether any particular renewable alternative is economically sensible. Costs can be prohibitive for transmission lines, but various proposals for massive infrastructure investment in high capacity, very long distance super grid transmission networks could be recovered with modest usage fees.

Grid input

At the power stations the energy is produced at a relatively low voltage between about 2.3 kV and 30 kV, depending on the size of the unit. The generator terminal voltage is then stepped up by the power station transformer to a higher voltage (115 kV to 765 kV AC, varying by the transmission system and by country) for transmission over long distances.


Transmitting electricity at high voltage reduces the fraction of energy lost to resistance, which averages around 7%.[8] For a given amount of power, a higher voltage reduces the current and thus the resistive losses in the conductor. For example, raising the voltage by a factor of 10 reduces the current by a corresponding factor of 10 and therefore the I2R losses by a factor of 100, provided the same sized conductors are used in both cases. Even if the conductor size (cross-sectional area) is reduced 10-fold to match the lower current the I2R losses are still reduced 10-fold. Long distance transmission is typically done with overhead lines at voltages of 115 to 1,200 kV. At extremely high voltages, more than 2,000 kV between conductor and ground, corona discharge losses are so large that they can offset the lower resistance loss in the line conductors. Measures to reduce corona losses include conductors having large diameter; often hollow to save weight, or bundles of two or more conductors.

Transmission and distribution losses in the USA were estimated at 6.6% in 1997[10] and 6.5% in 2007.[10] In general, losses are estimated from the discrepancy between energy produced (as reported by power plants) and energy sold to end customers; the difference between what is produced and what is consumed constitute transmission and distribution losses.

As of 1980, the longest cost-effective distance for DC electricity was determined to be 7,000 km (4,300 mi). For AC it was 4,000 km (2,500 mi), though all transmission lines in use today are substantially shorter.[7]


In an alternating current circuit, the inductance and capacitance of the phase conductors can be significant. The currents that flow in these components of the circuit impedance constitute reactive power, which transmits no energy to the load. Reactive current causes extra losses in the transmission circuit. The ratio of real power (transmitted to the load) to apparent power is the power factor. As reactive current increases, the reactive power increases and the power factor decreases. For systems with low power factors, losses are higher than for systems with high power factors. Utilities add capacitor banks and other components (such as phase-shifting transformers; static VAR compensators; physical transposition of the phase conductors; and flexible AC transmission systems, FACTS) throughout the system to control reactive power flow for reduction of losses and stabilization of system voltage.


Subtransmission is part of an electric power transmission system that runs at relatively lower voltages. It is uneconomical to connect all distribution substations to the high main transmission voltage, because the equipment is larger and more expensive. Typically, only larger substations connect with this high voltage. It is stepped down and sent to smaller substations in towns and neighborhoods. Subtransmission circuits are usually arranged in loops so that a single line failure does not cut off service to a large number of customers for more than a short time. While subtransmission circuits are usually carried on overhead lines, in urban areas buried cable may be used.

There is no fixed cutoff between subtransmission and transmission, or subtransmission and distribution. The voltage ranges overlap somewhat. Voltages of 69 kV, 115 kV and 138 kV are often used for subtransmission in North America. As power systems evolved, voltages formerly used for transmission were used for subtransmission, and subtransmission voltages became distribution voltages. Like transmission, subtransmission moves relatively large amounts of power, and like distribution, subtransmission covers an area instead of just point to point.[11]


Transmission grid exit

At the substations, transformers reduce the voltage to a lower level for distribution to commercial and residential users. This distribution is accomplished with a combination of sub-transmission (33 kV to 132 kV) and distribution (3.3 to 25 kV). Finally, at the point of use, the energy is transformed to low voltage (varying by country and customer requirements—see mains power systems).

High-voltage direct current

High-voltage direct current (HVDC) is used to transmit large amounts of power over long distances or for interconnections between asynchronous grids. When electrical energy is required to be transmitted over very long distances, it is more economical to transmit using direct current instead of alternating current. For a long transmission line, the lower losses and reduced construction cost of a DC line can offset the additional cost of converter stations at each end. Also, at high AC voltages, significant (although economically acceptable) amounts of energy are lost due to corona discharge, the capacitance between phases or, in the case of buried cables, between phases and the soil or water in which the cable is buried.

HVDC is also used for long submarine cables because over about 30 km length AC can no longer be applied. In that case special high voltage cables for DC are built. Many submarine cable connections – up to 600 km length – are in use nowadays.

HVDC links are sometimes used to stabilize against control problems with the AC electricity flow. The power transmitted by an AC line increases as the phase angle between source end voltage and destination ends increases, but too great a phase angle will allow the generators at either end of the line to fall out of step. Since the power flow in a DC link is controlled independently of the phases of the AC networks at either end of the link, this stability limit does not apply to a DC line, and it can transfer its full thermal rating. A DC link stabilizes the AC grids at either end, since power flow and phase angle can be controlled independently.

As an example, to adjust the flow of AC power on a hypothetical line between Seattle and Boston would require adjustment of the relative phase of the two electrical grids. This is an everyday occurrence in AC systems, but one that can occasionally fail when AC system components fail and place sudden loads on a remaining working grid system. With an HVDC line instead, such an interconnection would: (1) Convert AC in Seattle into HVDC. (2) Use HVDC for the three thousand miles of cross country transmission. Then (3) convert the HVDC to locally synchronized AC in Boston, and optionally in other cooperating cities along the transmission route. Such a system would be less prone to cascade failures if part of it were suddenly shut down. One prominent example of such a transmission line is the Pacific DC Intertie located in the Western United States.


The amount of power that can be sent over a transmission line is limited. The origins of the limits vary depending on the length of the line. For a short line, the heating of conductors due to line losses sets a thermal limit. If too much current is drawn, conductors may sag too close to the ground, or conductors and equipment may be damaged by overheating. For intermediate-length lines on the order of 100 km (62 mi), the limit is set by the voltage drop in the line. For longer AC lines, system stability sets the limit to the power that can be transferred. Approximately, the power flowing over an AC line is proportional to the cosine of the phase angle of the voltage and current at the receiving and transmitting ends. Since this angle varies depending on system loading and generation, it is undesirable for the angle to approach 90 degrees. Very approximately, the allowable product of line length and maximum load is proportional to the square of the system voltage. Series capacitors or phase-shifting transformers are used on long lines to improve stability. High-voltage direct current lines are restricted only by thermal and voltage drop limits, since the phase angle is not material to their operation.

Up to now, it has been almost impossible to foresee the temperature distribution along the cable route, so that the maximum applicable current load was usually set as a compromise between understanding of operation conditions and risk minimization. The availability of industrial Distributed Temperature Sensing (DTS) systems that measure in real time temperatures all along the cable is a first step in monitoring the transmission system capacity. This monitoring solution is based on using passive optical fibers as temperature sensors, either integrated directly inside a high voltage cable or mounted externally on the cable insulation. A solution for overhead lines is also available. In this case the optical fiber is integrated into the core of a phase wire of overhead transmission lines (OPPC). The integrated Dynamic Cable Rating (DCR) or also called Real Time Thermal Rating (RTTR) solution enables not only to continuously monitor the temperature of a high voltage cable circuit in real time, but to safely utilize the existing network capacity to its maximum. Furthermore it provides the ability to the operator to predict the behavior of the transmission system upon major changes made to its initial operating conditions.


To ensure safe and predictable operation the components of the transmission system are controlled with generators, switches, circuit breakers and loads. The voltage, power, frequency, load factor, and reliability capabilities of the transmission system are designed to provide cost effective performance for the customers.

Load balancing

The transmission system provides for base load and peak load capability, with safety and fault tolerance margins. The peak load times vary by region largely due to the industry mix. In very hot and very cold climates home air conditioning and heating loads have an effect on the overall load. They are typically highest in the late afternoon in the hottest part of the year and in mid-mornings and mid-evenings in the coldest part of the year. This makes the power requirements vary by the season and the time of day. Distribution system designs always take the base load and the peak load into consideration.

The transmission system usually does not have a large buffering capability to match the loads with the generation. Thus generation has to be kept matched to the load, to prevent overloading failures of the generation equipment.

Multiple sources and loads can be connected to the transmission system and they must be controlled to provide orderly transfer of power. In centralized power generation, only local control of generation is necessary, and it involves synchronization of the generation units, to prevent large transients and overload conditions.

In distributed power generation the generators are geographically distributed and the process to bring them online and offline must be carefully controlled. The load control signals can either be sent on separate lines or on the power lines themselves. To load balance the voltage and frequency can be used as a signaling mechanism.

In voltage signaling, the variation of voltage is used to increase generation. The power added by any system increases as the line voltage decreases. This arrangement is stable in principle. Voltage based regulation is complex to use in mesh networks, since the individual components and setpoints would need to be reconfigured every time a new generator is added to the mesh.

In frequency signaling, the generating units match the frequency of the power transmission system. In droop speed control, if the frequency decreases, the power is increased. (The drop in line frequency is an indication that the increased load is causing the generators to slow down.)

Wind turbines, v2g and other distributed storage and generation systems can be connected to the power grid, and interact with it to improve system operation.

Failure protection

Under excess load conditions, the system can be designed to fail gracefully rather than all at once. Brownouts occur when the supply power drops below the demand. Blackouts occur when the supply fails completely.

Rolling blackouts (also called load shedding) are intentionally engineered electrical power outages, used to distribute insufficient power when the demand for electricity exceeds the supply.


Operators of long transmission lines require reliable communications for control of the power grid and, often, associated generation and distribution facilities. Fault-sensing protective relays at each end of the line must communicate to monitor the flow of power into and out of the protected line section so that faulted conductors or equipment can be quickly de-energized and the balance of the system restored. Protection of the transmission line from short circuits and other faults is usually so critical that common carrier telecommunications are insufficiently reliable, and in remote areas a common carrier may not be available. Communication systems associated with a transmission project may use:

Rarely, and for short distances, a utility will use pilot-wires strung along the transmission line path. Leased circuits from common carriers are not preferred since availability is not under control of the electric power transmission organization.

Transmission lines can also be used to carry data: this is called power-line carrier, or PLC. PLC signals can be easily received with a radio for the long wave range.

Optical fibers can be included in the stranded conductors of a transmission line, in the overhead shield wires. These cables are known as optical ground wire (OPGW). Sometimes a standalone cable is used, all-dielectric self-supporting (ADSS) cable, attached to the transmission line cross arms.

Some jurisdictions, such as Minnesota, prohibit energy transmission companies from selling surplus communication bandwidth or acting as a telecommunications common carrier. Where the regulatory structure permits, the utility can sell capacity in extra dark fibers to a common carrier, providing another revenue stream.

Electricity market reform

Main article: Electricity market

Some regulators regard electric transmission to be a natural monopoly and there are moves in many countries to separately regulate transmission (see electricity market).

Spain was the first country to establish a regional transmission organization. In that country transmission operations and market operations are controlled by separate companies. The transmission system operator is Red Eléctrica de España (REE) and the wholesale electricity market operator is Operador del Mercado Ibérico de Energía – Polo Español, S.A. (OMEL) [2]. Spain's transmission system is interconnected with those of France, Portugal, and Morocco.

In the United States and parts of Canada, electrical transmission companies operate independently of generation and distribution companies.

Cost of electric power transmission

The cost of high voltage electricity transmission (as opposed to the costs of electricity distribution) is comparatively low, compared to all other costs arising in a consumer's electricity bill. In the UK transmission costs are about 0.2p/kWh compared to a delivered domestic price of around 10 p/kWh.

Research evaluates the level of capital expenditure in the electric power T&D equipment market will be worth $128.9bn in 2011.

Merchant transmission

Merchant transmission is an arrangement where a third party constructs and operates electric transmission lines through the franchise area of an unrelated utility.

Operating merchant transmission projects in the United States include the Cross Sound Cable from Long Island, New York to New Haven, Connecticut, Neptune RTS Transmission Line from Sayreville, N.J., to Newbridge, N.Y, ITC Holdings, Inc. transmission system in the midwest, and Path 15 in California. Additional projects are in development or have been proposed throughout the United States.

There is only one unregulated or market interconnector in Australia: Basslink between Tasmania and Victoria. Two DC links originally implemented as market interconnectors Directlink and Murraylink have been converted to regulated interconnectors. NEMMCO


A major barrier to wider adoption of merchant transmission is the difficulty in identifying who benefits from the facility so that the beneficiaries will pay the toll. Also, it is difficult for a merchant transmission line to compete when the alternative transmission lines are subsidized by other utility businesses.


Source: Wikipedia