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An electrical grid is an interconnected network for delivering electricity from suppliers to consumers. It consists of generating stations that produce electrical power, high-voltage transmission lines that carry power from distant sources to demand centers, and distribution lines that connect individual customers.[1]

Power stations may be located near a fuel source, at a dam site, or to take advantage of renewable energy sources, and are often located away from heavily populated areas. They are usually quite large to take advantage of the economies of scale. The electric power which is generated is stepped up to a higher voltage-at which it connects to the transmission network.

The transmission network will move the power long distances, sometimes across international boundaries, until it reaches its wholesale customer (usually the company that owns the local distribution network).

On arrival at a substation, the power will be stepped down from a transmission level voltage to a distribution level voltage. As it exits the substation, it enters the distribution wiring. Finally, upon arrival at the service location, the power is stepped down again from the distribution voltage to the required service voltage(s).
Since its inception in the Industrial Age, the electrical grid has evolved from an insular system that serviced a particular geographic area to a wider, expansive network that incorporated multiple areas. At one point, all energy was produced near the device or service requiring that energy. In the early 19th century, electricity was a novel invention that competed with steam, hydraulics, direct heating and cooling, light, and most notably gas. During this period, gas production and delivery had become the first centralized element in the modern energy industry. It was first produced on customer’s premises but later evolved into large gasifiers that enjoyed economies of scale. Virtually every city in the U.S. and Europe had town gas piped through their municipalities as it was a dominant form of household energy use. By the mid-19th century, electric arc lighting soon became advantageous compared to volatile gas lamps since gas lamps produced poor light, tremendous wasted heat which made rooms hot and smoky, and noxious elements in the form of hydrogen and carbon monoxide. Modeled after the gas lighting industry, the first electric utility systems supplied energy through virtual mains to light filtration as opposed to gas burners. With this, electric utilities also took advantage of economies of scale and moved to centralized power generation, distribution, and system management.

With the realization of long distance power transmission it was possible to interconnect different central stations to balance loads and improve load factors. Interconnection became increasingly desirable as electrification grew rapidly in the early years of the 20th century. Like telegraphy before it, wired electricity was often carried on and through the circuits of colonial rule.[3]

Charles Merz, of the Merz & McLellan consulting partnership, built the Neptune Bank Power Station near Newcastle upon Tyne in 1901,[4] and by 1912 had developed into the largest integrated power system in Europe.[5] In 1905 he tried to influence Parliament to unify the variety of voltages and frequencies in the country’s electricity supply industry, but it was not until World War I that Parliament began to take this idea seriously, appointing him head of a Parliamentary Committee to address the problem. In 1916 Merz pointed out that the UK could use its small size to its advantage, by creating a dense distribution grid to feed its industries efficiently. His findings led to the Williamson Report of 1918, which in turn created the Electricity Supply Bill of 1919. The bill was the first step towards an integrated electricity system.

The more significant Electricity (Supply) Act of 1926 led to the setting up of the National Grid.[6] The Central Electricity Board standardised the nation’s electricity supply and established the first synchronised AC grid, running at 132 kilovolts and 50 Hertz. This started operating as a national system, the National Grid, in 1938.

In the United States in the 1920s, utilities joined together establishing a wider utility grid as joint-operations saw the benefits of sharing peak load coverage and backup power. Also, electric utilities were easily financed by Wall Street private investors who backed many of their ventures. In 1934, with the passage of the Public Utility Holding Company Act (USA), electric utilities were recognized as public goods of importance along with gas, water, and telephone companies and thereby were given outlined restrictions and regulatory oversight of their operations. This ushered in the Golden Age of Regulation for more than 60 years. However, with the successful deregulation of airlines and telecommunication industries in late 1970s, the Energy Policy Act (EPAct) of 1992 advocated deregulation of electric utilities by creating wholesale electric markets. It required transmission line owners to allow electric generation companies open access to their network

As the 21st century progresses, the electric utility industry seeks to take advantage of novel approaches to meet growing energy demand. Utilities are under pressure to evolve their classic topologies to accommodate distributed generation. As generation becomes more common from rooftop solar and wind generators, the differences between distribution and transmission grids will continue to blur. Also, demand response is a grid management technique where retail or wholesale customers are requested either electronically or manually to reduce their load. Currently, transmission grid operators use demand response to request load reduction from major energy users such as industrial plants.[10]

With everything interconnected, and open competition occurring in a free market economy, it starts to make sense to allow and even encourage distributed generation (DG). Smaller generators, usually not owned by the utility, can be brought on-line to help supply the need for power. The smaller generation facility might be a home-owner with excess power from their solar panel or wind turbine. It might be a small office with a diesel generator. These resources can be brought on-line either at the utility’s behest, or by owner of the generation in an effort to sell electricity. Many small generators are allowed to sell electricity back to the grid for the same price they would pay to buy it. Furthermore, numerous efforts are underway to develop a “smart grid”. In the U.S., the Energy Policy Act of 2005 and Title XIII of the Energy Independence and Security Act of 2007 are providing funding to encourage smart grid development. The hope is to enable utilities to better predict their needs, and in some cases involve consumers in some form of time-of-use based tariff. Funds have also been allocated to develop more robust energy control technologies.[11][12]

Various planned and proposed systems to dramatically increase transmission capacity are known as super, or mega grids. The promised benefits include enabling the renewable energy industry to sell electricity to distant markets, the ability to increase usage of intermittent energy sources by balancing them across vast geological regions, and the removal of congestion that prevents electricity markets from flourishing. Local opposition to siting new lines and the significant cost of these projects are major obstacles to super grids. One study for a European super grid estimates that as much as 750 GW of extra transmission capacity would be required- capacity that would be accommodated in increments of 5 GW HVDC lines. A recent proposal by Transcanada priced a 1,600-km, 3-GW HVDC line at $3 billion USD and would require a corridor 60 meters wide. In India, a recent 6 GW, 1,850-km proposal was priced at $790 million and would require a 69 meter wide right of way. With 750 GW of new HVDC transmission capacity required for a European super grid, the land and money needed for new transmission lines would be considerable…

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