For electricity from a power station or power-generating unit to be delivered to a customer, the two must be connected by an electricity network. Over the past century these networks have developed into massive systems.

When the industry was in its infancy, networks were a simple pattern of lines radiating from a power station to the small number of customers that each power station supplied, usually with a number of customers on each line. When the number of customers was small and the distances over which electricity was transported were short, these lines could operate with either direct current (DC) or alternating current (AC).

As the distances increased, it became necessary to raise the voltage at which the electricity was transmitted to reduce the current and the resistive losses in the lines when high currents were flowing. The AC transformer allowed the voltage on an AC line to be increased and then decreased again efficiently and with relatively ease, whereas this was not possible for the DC system. As a consequence, alternating current became the standard for most electricity networks.

Alternating current continued to dominate across the 20th century, but developments in power electronics led to a resurgence in interest in the DC transmission of power at the end of the century in the form of high-voltage DC lines. These are increasingly used for sending large amounts of power over long distances for which they are proving more efficient than conventional AC lines.

Back at the start of the 20th century, the growth in size of what was initially a myriad of independent electricity networks soon led to overlap between service areas. While competition was good for the electricity market, the range of different operating standards, particularly voltages and frequencies, made actual competition difficult. A proliferation of independent networks was also costly, and in the final analysis it was unnecessary because if different operators standardized on their voltages, the suppliers of electric power could all use the same network rather than each building its own.

Standardization was pushed through in many countries during the first half of the 20th century and national grid systems were established that were either government owned or controlled by legislation to ensure that the monopoly they created could not be exploited. However, there are still vestiges of the early market proliferation of standards to be found today in regional variations, such as the delivery of alternating current at either 50 Hz or 60 Hz and the different standard voltage levels used.

As national networks were built up, a hierarchical structure became established based on the industry model in which electric power was generated in large central power stations. These large power plants fed their power into what is now the transmission network, a high-voltage backbone that carries electricity at high voltage from region to region. From this transmission network, power is fed into lower-voltage distribution networks and these then deliver the power to the customers.

An electricity network of any type must be kept in balance if voltage and frequency conditions are to be maintained at a stable level. This is a consequence of the ephemeral nature of electricity. The balance between the actual demand for electricity on the network and the power being fed into it must be maintained within narrow limits. Any deviation from balance leads to changes in frequency and voltage and, if these become too large, can lead to a system failure.

The organization charged with maintaining the balance is called the system operator. This organization has limited control over the demand level but it must be able to control the output of the power plants connected to its network. For most networks this has traditionally involved having a variety of different types of power stations supplying power. The first of these are base-load power plants. These are usually large fossil fuel and nuclear power plants (but they may also include hydropower) that keep running at maximum output all the time, supplying the basic demand on the network. Next are intermediate-load power plants, often gas turbine based, which do not run all the time but might start up in the morning to meet the daytime rise in demand and then close down in the evening when demand begins to fall again. These two types can supply the broad level of demand during both day and night but there will always be a need for even faster-acting plants that can provide the power to meet sudden peaks in demand. These are called peak-load or peaking power plants. In general, the power from base-load power plants is the cheapest available, that from intermediate load plants is more expensive, and that from peak-load plants is the most expensive.

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