Electrical grid

Electrical grid
General layout of electricity networks. Voltages and depictions of electrical lines are typical for Germany and other European systems.

An electrical grid is a vast, interconnected network for delivering electricity from suppliers to consumers. It consists of three main components: 1) generating plants that produce electricity from combustible fuels (coal, natural gas, biomass) or non-combustible fuels (wind, solar, nuclear, hydro power); 2) transmission lines that carry electricity from power plants to demand centers; and 3) transformers that reduce voltage so distribution lines carry power for final delivery.[1]

In the power industry, electrical grid is a term used for an electricity network which includes the following three distinct operations:

  1. Electricity generation - Generating plants are usually located near a source of water, and away from heavily populated areas. They are usually quite large in order 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.
  2. Electric power transmission - The transmission network will move (wheel) the power long distances-often across state lines, and sometimes across international boundaries until it reaches its wholesale customer (usually the company that owns the local distribution network).
  3. Electricity distribution - Upon arrival at the substation, the power will be stepped down in voltage—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).



The term grid usually refers to a network, and should not be taken to imply a particular physical layout or breadth. Grid may also be used to refer to an entire continent's electrical network, a regional transmission network or may be used to describe a subnetwork such as a local utility's transmission grid or distribution grid.


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. Modeling after the gas lighting industry, Thomas Edison invented the first electric utility system which 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.[2]

During the 20th century, institutional arrangement of electric utilities changed. At the beginning, electric utilities were isolated systems without connection to other utilities and serviced a specific service territory. 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, 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. [2] [3]


With deregulation, a more complex environment occurred as opposed to the traditional vertically-integrated monopoly that oversees the entire grid’s operations. Newer participants entered the market including Independent Power Providers (IPPs) who decided and constructed the new facility; Transmission Companies (TRANSCOs) who constructed and owned the transmission equipment; retailers who signed up end-use customers, procured their electric service, and billed them; integrated energy companies (combined IPPs and retailers); and Independent System Operation (ISO) who managed the grid being indifferent to market outcomes. Also, day-to-day to long term operations altered. Infrastructure additions which were long-term planning now became an investment analysis with IPPs that decided construction of a new power plant under economic considerations (i.e., taxes, labor and material costs) and ability to obtain financing. Load and supply management that fell under mid-term planning became risk management as private utilities had to manage a portfolio of end customers and assets with the company’s risk preference. Day-ahead scheduling and real time grid management in the short-term planning which involves forecasting demand and dispatch schedule became asset management as power plants and grid equipment were assets to be scheduled and dispatched. Here, the ISO sets dispatch schedule at the market clearing price where the supply bids of generating units equilibriated with demand bids of retailers. [3]

Many engineers argue the unfortunate disadvantages that stem from deregulation. Where under regulated monopolies, long distance energy lines were used for emergencies as backup in case of generation outages, now, particularly in North America, the majority of domestic generation is sold over ever-increasing distances on the wholesale market before delivery to customers. Consequently, the power grid witnesses fluctuating power flows that impact system stability and reliability. [3] [4] To reduce system failure, the power flow of a transmission line must operate below the transmission line’s capacity. Yet now, companies are continually operating near capacity. Additionally, as utilities exchange power to other utilities, power flows along all paths of connection. Therefore, any change in one point of generation and transmission affects the load on all other points. Oftentimes, this is unanticipated and uncontrolled. Usually, a longer line’s capacity is less than a shorter line’s capacity. If not, power-supply instability occurs resulting in transmission lines that break or sag. Such phase and voltage fluctuations cause system interruptions as witnessed in the Northeast Blackout of 1965 (which involved a circuit breaker to trip) and 2003 (which involved a sagging line on a tree that rippled in magnitude). Furthermore, IPPs add new generating units at random locations determined by economics that extend the distance to main consuming areas adversely affecting power supply. Also, utilities, because of competitive information needs, do not publicize needed data to predict and react to system stress such as with energy flows and blackout statistics. Overall, the economics of the electrical grid do not align sufficiently with the physics of the grid. Experts advocate for fundamental changes to avoid serious consequences in the near future. [3]


Structure of distribution grids

The wide area synchronous grids of Europe. Most are members of the European Transmission System Operators association.
The Continental U.S. power transmission grid consists of about 300,000 km of lines operated by approximately 500 companies.
High-voltage direct current interconnections in western Europe - red are existing links, green are under construction, and blue are proposed.

The structure, or "topology" of a grid can vary considerably. The physical layout is often forced by what land is available and its geology. The logical topology can vary depending on the constraints of budget, requirements for system reliability, and the load and generation characteristics.

The cheapest and simplest topology for a distribution or transmission grid is a radial structure. This is a tree shape where power from a large supply radiates out into progressively lower voltage lines until the destination homes and businesses are reached.

Most transmission grids require the reliability that more complex mesh networks provide. If one were to imagine running redundant lines between limbs/branches of a tree that could be turned in case any particular limb of the tree were severed, then this image approximates how a mesh system operates. The expense of mesh topologies restrict their application to transmission and medium voltage distribution grids. Redundancy allows line failures to occur and power is simply rerouted while workmen repair the damaged and deactivated line.

Other topologies used are looped systems found in Europe and tied ring networks.

In cities and towns of North America, the grid tends to follow the classic radially fed design. A substation receives its power from the transmission network, the power is stepped down with a transformer and sent to a bus from which feeders fan out in all directions across the countryside. These feeders carry three-phase power, and tend to follow the major streets near the substation. As the distance from the substation grows, the fanout continues as smaller laterals spread out to cover areas missed by the feeders. This tree-like structure grows outward from the substation, but for reliability reasons, usually contains at least one unused backup connection to a nearby substation. This connection can be enabled in case of an emergency, so that a portion of a substation's service territory can be alternatively fed by another substation.

Geography of transmission networks

Transmission networks are more complex with redundant pathways. For example, see the map of the United States' (right) high-voltage transmission network.

A wide area synchronous grid or "interconnection" is a group of distribution areas all operating with alternating current (AC) frequencies synchronized (so that peaks occur at the same time). This allows transmission of AC power throughout the area, connecting a large number of electricity generators and consumers and potentially enabling more efficient electricity markets and redundant generation. Interconnection maps are shown of North America (right) and Europe (below left).

Electricity generation and consumption must be balanced across the entire grid, because energy is consumed almost immediately after it is produced. A large failure in one part of the grid - unless quickly compensated for - can cause current to re-route itself to flow from the remaining generators to consumers over transmission lines of insufficient capacity, causing further failures. One downside to a widely connected grid is thus the possibility of cascading failure and widespread power outage. A central authority is usually designated to facilitate communication and develop protocols to maintain a stable grid. For example, the North American Electric Reliability Corporation gained binding powers in the United States in 2006, and has advisory powers in the applicable parts of Canada and Mexico. The U.S. government has also designated National Interest Electric Transmission Corridors, where it believes transmission bottlenecks have developed.

Some areas, for example rural communities in Alaska, do not operate on a large grid, relying instead on local diesel generators.[5]

High-voltage direct current lines or variable frequency transformers can be used to connect two alternating current interconnection networks which are not synchronized with each other. This provides the benefit of interconnection without the need to synchronize an even wider area. For example, compare the wide area synchronous grid map of Europe (above left) with the map of HVDC lines (below right).

Redundancy and defining "grid"

A town is only said to have achieved grid connection when it is connected to several redundant sources, generally involving long-distance transmission.

This redundancy is limited. Existing national or regional grids simply provide the interconnection of facilities to utilize whatever redundancy is available. The exact stage of development at which the supply structure becomes a grid is arbitrary. Similarly, the term national grid is something of an anachronism in many parts of the world, as transmission cables now frequently cross national boundaries. The terms distribution grid for local connections and transmission grid for long-distance transmissions are therefore preferred, but national grid is often still used for the overall structure.

Aging Infrastructure

Despite the novel institutional arrangements and network designs of the electrical grid, its power delivery infrastructures suffer aging across the developed world. Four contributing factors to the current state of the electric grid and its consequences include:

  1. Aging power equipment – older equipment have higher failure rates, leading to customer interruption rates affecting the economy and society; also, older assets and facilities lead to higher inspection maintenance costs and further repair/restoration costs.
  2. Obsolete system layout – older areas require serious additional substation sites and rights-of-way that cannot be obtained in current area and are forced to use existing, insufficient facilities.
  3. Outdated engineering – traditional tools for power delivery planning and engineering are ineffective in addressing current problems of aged equipment, obsolete system layouts, and modern deregulated loading levels
  4. Old cultural value – planning, engineering, operating of system using concepts and procedures that worked in vertically integrated industry exacerbate the problem under a deregulated industry [6]

Modern trends

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.[7]

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. [8] [9]

Decentralization of the power transmission distribution system is vital to the success and reliability of this system. Currently the system is reliant upon relatively few generation stations. This makes current systems susceptible to impact from failures not within said area. Micro grids would have local power generation, and allow smaller grid areas to be separated from the rest of the grid if a failure were to occur. Furthermore, micro grid systems could help power each other if needed. Generation within a micro grid could be a downsized industrial generator or several smaller systems such as photo-voltaic systems, or wind generation. When combined with Smart Grid technology, electricity could be better controlled and distributed, and more efficient. Conversely, 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.

Future Trends

As deregulation continues further, utilities are driven to sell their assets as the energy market follows in line with the gas market in use of the futures and spot markets and other financial arrangements. Even globalization with foreign purchases are taking place. Recently[when?], U.K’s National Grid, the largest private electric utility in the world, bought New England’s electric system for $3.2 billion.[citation needed] Also, Scottish Power purchased Pacific Energy for $12.8 billion. Domestically, local electric and gas firms begin to merge operations as they see advantage of joint affiliation especially with the reduced cost of joint-metering. Technological advances will take place in the competitive wholesale electric markets such examples already being utilized include fuel cells used in space flight, aeroderivative gas turbines used in jet aircrafts, solar engineering and photovoltaic systems, off-shore wind farms, and the communication advances spawned by the digital world particularly with microprocessing which aids in monitoring and dispatching. [2]

Electricity will continue to see a growing demand in the future years as the Information Revolution is highly reliant on it, including emerging new electricity-exclusive technologies, developments in space conditioning, industrial process, and transportation (i.e., hybrid vehicles, locomotives). [2]

See also


  1. ^ Kaplan, S. M. (2009). Smart Grid. Electrical Power Transmission: Background and Policy Issues. The Capital.Net, Government Series. Pp. 1-42.
  2. ^ a b c d Borberly, A. and Kreider, J. F. (2001). Distributed Generation: The Power Paradigm for the New Millennium. CRC Press, Boca Raton, FL. 400 pgs.
  3. ^ a b c d Mazer, A. (2007). Electric Power Planning for Regulated and Deregulated Markets. John, Wiley, and Sons, Inc., Hoboken, NJ. 313pgs.
  4. ^ Albert, R., Albert, I., and Nakarado, G. L. (2004). Structural Vulnerability of the North American Power Grid. Physical Review E 69 025103(R). 1-4 pgs.
  5. ^ Energy profile of Alaska, United States, Editor: Cutler J. Cleveland, Last Updated: July 30, 2008 - Encyclopedia of Earth
  6. ^ Willis, H. L., Welch, G. V., and Schrieber, R. R. (2001). Aging Power Delivery Infrastructures. Marcel Dekker, Inc. : New York. 551 pgs.
  7. ^ "Industry Cross-Section Develops Action Plans at PJM Demand Response Symposium". Reuters. 2008-08-13. http://www.reuters.com/article/pressRelease/idUS206497+16-May-2008+PRN20080516. Retrieved 2008-11-22. "Demand response can be achieved at the wholesale level with major energy users such as industrial plants curtailing power use and receiving payment for participating." 
  8. ^ "U.S. Energy Independence and Security Act of 2007". http://www.thomas.gov/cgi-bin/query/C?c110:./temp/~c110z6D5F8. Retrieved 2007-12-23. [dead link]
  9. ^ DOE Provides up to $51.8 Million to Modernize the U.S. Electric Grid System, June 27, 2007, U.S. Department of Energy (DOE)

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