History and Evolution of the Electric Power Industry
– Commercial distribution of electric power began in 1882
– Growing economic and safety concerns led to industry regulation in the 1880s and 1890s
– Reliable and economical electric power became essential for developed economies
– Electricity was seen as a natural monopoly in the mid-20th century
– Vertical integration and governmental supervision regulated the industry
– Independent system operator evolved into regional transmission organizations (RTOs)
– FERC’s Order No. 2000 specified minimum capabilities for RTOs
– Restructuring of the U.S. electricity industry
– Setbacks: California energy crisis of 2000 and Enron scandal
– Northeast blackout of 2003 highlighted the need for competitive pricing and reliability standards
– Deregulation and globalization in the electricity industry
– Wholesale electricity markets operate similar to shares and currency trading in some countries
– Utilities driven to sell assets as energy market aligns with gas market
– Globalization with foreign purchases, such as UK’s National Grid buying utilities in New England
– Mergers of local electric and gas firms for joint affiliation and reduced costs
– Technological advances in competitive wholesale electric markets, including fuel cells and offshore wind farms
Generation of Electric Power
– Electricity can be generated through chemical reactions or rotary motion
– Thomas Edison developed commercially viable direct current (DC) electricity in 1878
– Edison opened the world’s first steam-powered electricity generating station in 1882
– Alternating current (AC) systems were introduced in the mid to late 1880s
– AC power had advantages in transmission and distribution efficiency
– Industrialists like George Westinghouse and Nikola Tesla contributed to AC power development
– 2019 world electricity generation by source: coal (37%), natural gas (24%), hydro (16%), nuclear (10%), wind (5%), solar (3%), other (5%)
– Commercial electric power is produced by generators
– Primary energy sources for generators include fossil fuels, nuclear fission, geothermal steam, and falling water
– Renewable sources like wind and solar energy are gaining commercial importance
– Enough generation capacity must be installed to meet peak demands
Transmission and Distribution of Electric Power
– AC power allowed for voltage conversion through transformers
– Increasing voltage reduced current, conductor size, and distribution losses
– AC and DC systems competed during the ‘war of the currents’
– AC eventually became the dominant power system due to technical and economic advantages
– Electric power transmission is the bulk movement of electrical energy
– Transmission networks connect power plants to substations
– The power grid refers to the combined transmission and distribution network
– Synchronous grids directly connect generators and consumers
– Many countries have separated the transmission business from the distribution business
– Electric power distribution is the final stage in delivering electricity
– Distribution substations lower transmission voltage using transformers
– Primary distribution lines carry medium voltage power to distribution transformers
– Distribution transformers lower the voltage for utilization by customers
– Customers are connected to distribution lines through service drops
Power Electronics in the Electric Power Industry
– Power electronics applies solid-state electronics to control and convert electric power
– Mercury arc rectifiers and selenium rectifiers were early developments
– Transistor technology, starting with the point-contact transistor in 1947, replaced vacuum tubes
– The invention of the MOSFET in 1959 revolutionized power electronics
– Power MOSFET became the most common power device due to its performance and ease of use
Organization and Retailing in the Electric Power Industry
– The electric power industry consists of generation, transmission, distribution, and retailing
– Electric power companies often own the entire infrastructure, creating a natural monopoly
– The industry is heavily regulated and frequently government-owned and operated
– Market reform and deregulation have led to changes in ownership and involvement in different processes
– Electricity retailing and distribution have seen more deregulation than generation and transmission
– Electric retailing involves the final sale of electricity to consumers
– It is the process of delivering electricity from generation to end-use
– Retailing is the last step in the electricity supply chain
– Retailers may be private or government-controlled organizations
– The business model of electric utilities has evolved over time
– The organization of the electrical sector varies by country or region
– Some places have government-controlled organizations for generation, transmission, and distribution
– Other regions have private or investor-owned utility companies
– Access to grid electricity is not universal, with millions still lacking access
– Electrification efforts have reduced the number of people without access Source: https://en.wikipedia.org/wiki/Electric_power_industry
The electric power industry covers the generation, transmission, distribution and sale of electric power to the general public and industry. The commercial distribution of electric power started in 1882 when electricity was produced for electric lighting. In the 1880s and 1890s, growing economic and safety concerns lead to the regulation of the industry. What was once an expensive novelty limited to the most densely populated areas, reliable and economical electric power has become an essential aspect for normal operation of all elements of developed economies.
By the middle of the 20th century, electricity was seen as a "natural monopoly", only efficient if a restricted number of organizations participated in the market; in some areas, vertically-integrated companies provide all stages from generation to retail, and only governmental supervision regulated the rate of return and cost structure.
Since the 1990s, many regions have broken up the generation and distribution of electric power[citation needed]. While such markets can be abusively manipulated with consequent adverse price and reliability impact to consumers, generally competitive production of electrical energy leads to worthwhile improvements in efficiency[citation needed]. However, transmission and distribution are harder problems since returns on investment are not as easy to find.
