What Do We Mean When We Talk About “The Grid”?

The American electricity grid is one of the greatest engineering accomplishments of the 20th century. In 1882, Thomas Edison’s Illuminating Company created the first central commercial generator in lower Manhattan, delivering electricity to local businesses, including The New York Times. By the 1920s, most cities and towns had access to electricity, immensely improving quality of life, but rural areas were still in the dark. With Franklin D. Roosevelt’s Rural Electrification Administration, the 1930s saw the electricity grid expand to America’s countryside, changing the lives of millions.

Now that grid needs an upgrade. America needs to reduce its reliance on fossil fuels, scale-up renewable energy, and make the grid “smarter.” But what do we mean when we talk about “the grid”? To better understand it, in this blog post we’ll break the grid down into its four main parts: generation, transmission, distribution and retail.

1) Generation

Electrical energy can come from a variety of sources, including renewables, such as hydropower and solar photovoltaic (PV) panels, and non-renewables, such as coal, natural gas and nuclear. To be considered a “generator,” a facility must produce at least 1 megawatt of energy—about enough electrical capacity to power approximately 1,000 homes. Each state regulates the electric companies and utilities who own generators and approves any proposed generator before it’s built. As of August 2016, there were 7,658 generators in the US. In 2016, approximately 65% of US electricity generation came from fossil fuels, 20% came from nuclear energy, and 15% came from renewables. The ratio of renewables to non-renewable varies significantly across states. 49% of Oregon’s electricity comes from renewable sources and the state plans on being 100% powered by clean energy by 2050. By contrast, 88% of Wyoming’s electricity came from coal in 2015 and 11% from renewable sources, mostly wind.

Energy mix graph

EIA Graph: Total MWh Output by Energy Technology 2016. EnviroNews. 7 February 2017. Web 14 August 2017 https://www.environews.tv/020417-doe-report-solar-creates-u-s-electricity-jobs-oil-gas-coal-nuclear-combined/.

2) Transmission

Electricity travels over long distances on high-voltage transmission lines from a generator to energy users. Transmission lines can be overhead (those huge towers you see cutting across rural land) or underground. Electricity is lost when it travels over distance. That’s because all the electrons rushing through the lines collide with one another, converting into heat that cannot be recaptured. The amount of power loss is determined by the wire’s resistance multiplied by the square of the current. Because of the “square” factor, even a slight increase in current results in a huge increase in power loss. Power is the product of voltage and current. Ohm’s law states that voltage is the product of current and resistance. A way to reduce current is to increase the voltage, which ensures the same amount of power is running through the transmission line but less of it is lost. As a result, the voltage on transmission lines is incredibly high—typically around 110,000 volts. If those lines went directly to your home, the tremendous amount of electrical energy would cause some serious damage. Instead, transmission lines are directed to substations close to end-users where the electricity is converted to a lower voltage.

Electricity in the US travels along three transmission networks: the Western Interconnection, the Eastern Interconnection, and the Electric Reliability Council of Texas, a network only in the Lone Star state. The networks are operated by Independent System Operators (ISOs) or Regional Transmission Organizations (RTO). An ISO is responsible for managing the part of a larger network within a state and an RTO is responsible for managing the part of a network in a region. NYISO is the ISO which manages the part of the Eastern Connection within New York State. PJM is the RTO which manages the part of the Eastern Connection within thirteen states around the Atlantic and D.C.  Electricity supply needs to match electricity demand, every second of every day. ISOs and RTOs are responsible for ensuring that supply meets demand. A misbalance of electrical energy can mean widespread power disruptions and blackouts. To prevent that, the ISOs predict the amount of electricity that will be consumed by their region, monitor inflows and outflows of electricity, and determine which generators can produce electricity at the lowest cost at a given time.

3) Distribution

Distributors manage the lower voltage transmission lines that deliver electricity to homes and businesses. These are the lines you see on city streets and in your neighborhood. When a fallen tree causes a blackout in your area, your distributor is the one who restores power. Distribution is regulated at the state level and the state determines retail rates for electricity supply and delivery.

4) Retail

Last, utilities charge end-users for the electricity they consume. If you don’t have a smart meter, a utility worker comes to your home every few months to check the meter and bills you for the electricity you used.


Grid diagram

The electricity grid. Digital image. Grid+. 23 May 2017. Web 14 August 2017 https://blog.gridplus.io/grid-2-electricity-markets-101-c61fefcb6531.

The grid of the future

The electric grid wasn’t designed to be the enormous system it grew into. As utilities built more generators, the cost of electricity decreased. As the cost of electricity decreased, more people demanded electricity, and so on. The grid especially wasn’t designed for the rise of renewable energy sources we are seeing today. Next week, we’ll explore some of the challenges the conventional grid is facing and why we should be excited about the smarter, more efficient grid of the future.


Leave a Reply

Your email address will not be published. Required fields are marked *