The electric power industry covers the

generation A generation refers to all of the people born and living at about the same time, regarded collectively. It can also be described as, "the average period, generally considered to be about 20–⁠30 years, during which children are born and gr ...

, transmission,

distribution Distribution may refer to: Mathematics *Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations * Probability distribution, the probability of a particular value or value range of a vari ...

and sale of

electric power Electric power is the rate at which electrical energy is transferred by an electric circuit. The SI unit of power is the watt, one joule per second. Standard prefixes apply to watts as with other SI units: thousands, millions and billions o ...

to the general public and industry. The commodity sold is actually energy, not

power Power most often refers to: * Power (physics), meaning "rate of doing work" ** Engine power, the power put out by an engine ** Electric power * Power (social and political), the ability to influence people or events ** Abusive power Power may a ...

, e.g. consumers pay for

kilowatt-hours A kilowatt-hour (unit symbol: kW⋅h or kW h; commonly written as kWh) is a unit of energy: one kilowatt of power for one hour. In terms of SI derived units with special names, it equals 3.6 megajoules (MJ). Kilowatt-hours are a common bil ...

, power multiplied by time, which is energy. The commercial distribution of electricity started in 1882 when electricity was produced for

electric lighting An electric light, lamp, or light bulb is an electrical component that produces light. It is the most common form of artificial lighting. Lamps usually have a base made of ceramic, metal, glass, or plastic, which secures the lamp in the soc ...

. 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 A natural monopoly is a monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming adv ...

", 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. 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. However, transmission and distribution are harder problems since returns on investment are not as easy to find.

History

Although electricity had been known to be produced as a result of the chemical reactions that take place in an

electrolytic cell An electrolytic cell is an electrochemical cell that utilizes an external source of electrical energy to force a chemical reaction that would not otherwise occur. The external energy source is a voltage applied between the cell′s two electrod ...

since

Alessandro Volta Alessandro Giuseppe Antonio Anastasio Volta (, ; 18 February 1745 – 5 March 1827) was an Italian physicist, chemist and lay Catholic who was a pioneer of electricity and power who is credited as the inventor of the electric battery and the ...

developed the

voltaic pile upright=1.2, Schematic diagram of a copper–zinc voltaic pile. The copper and zinc discs were separated by cardboard or felt spacers soaked in salt water (the electrolyte). Volta's original piles contained an additional zinc disk at the bottom, ...

in 1800, its production by this means was, and still is, expensive. In 1831,

Michael Faraday Michael Faraday (; 22 September 1791 – 25 August 1867) was an English scientist who contributed to the study of electromagnetism and electrochemistry. His main discoveries include the principles underlying electromagnetic inducti ...

devised a machine that generated electricity from rotary motion, but it took almost 50 years for the technology to reach a commercially viable stage. In 1878, in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

Thomas Edison Thomas Alva Edison (February 11, 1847October 18, 1931) was an American inventor and businessman. He developed many devices in fields such as electric power generation, mass communication, sound recording, and motion pictures. These inventio ...

developed and sold a commercially viable replacement for gas lighting and heating using locally generated and distributed

direct current Direct current (DC) is one-directional flow of electric charge. An electrochemical cell is a prime example of DC power. Direct current may flow through a conductor such as a wire, but can also flow through semiconductors, insulators, or even ...

electricity. Robert Hammond, in December 1881, demonstrated the new electric light in the

Sussex Sussex (), from the Old English (), is a historic county in South East England that was formerly an independent medieval Anglo-Saxon kingdom. It is bounded to the west by Hampshire, north by Surrey, northeast by Kent, south by the English ...

town of

Brighton Brighton () is a seaside resort and one of the two main areas of the City of Brighton and Hove in the county of East Sussex, England. It is located south of London. Archaeological evidence of settlement in the area dates back to the Bronze A ...

in the UK for a trial period. The ensuing success of this installation enabled Hammond to put this venture on both a commercial and legal footing, as a number of shop owners wanted to use the new electric light. Thus the Hammond Electricity Supply Co. was launched. In early 1882, Edison opened the world's first steam-powered electricity generating station at

Holborn Viaduct Holborn Viaduct is a road bridge in London and the name of the street which crosses it (which forms part of the A40 route). It links Holborn, via Holborn Circus, with Newgate Street, in the City of London financial district, passing over ...

London London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...

, where he had entered into an agreement with the City Corporation for a period of three months to provide street lighting. In time he had supplied a number of local consumers with electric light. The method of supply was direct current (DC). Whilst the Godalming and the 1882 Holborn Viaduct Scheme closed after a few years the Brighton Scheme continued on, and supply was in 1887 made available for 24 hours per day. It was later on in the year in September 1882 that Edison opened the

Pearl Street Power Station Pearl Street Station was the first commercial central power plant in the United States. It was located at 255–257 Pearl Street in the Financial District of Manhattan, New York City, just south of Fulton Street on a site measuring . The statio ...

New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...

and again it was a DC supply. It was for this reason that the generation was close to or on the consumer's premises as Edison had no means of voltage conversion. The voltage chosen for any electrical system is a compromise. For a given amount of power transmitted, increasing the

voltage Voltage, also known as electric pressure, electric tension, or (electric) potential difference, is the difference in electric potential between two points. In a static electric field, it corresponds to the work needed per unit of charge to m ...

reduces the

current Currents, Current or The Current may refer to: Science and technology * Current (fluid), the flow of a liquid or a gas ** Air current, a flow of air ** Ocean current, a current in the ocean *** Rip current, a kind of water current ** Current (stre ...

and therefore reduces the required wire thickness. Unfortunately it also increases the danger from direct contact and increases the required

insulation Insulation may refer to: Thermal * Thermal insulation, use of materials to reduce rates of heat transfer ** List of insulation materials ** Building insulation, thermal insulation added to buildings for comfort and energy efficiency *** Insulated ...

thickness. Furthermore, some load types were difficult or impossible to make work with higher voltages. The overall effect was that Edison's system required power stations to be within a mile of the consumers. While this could work in city centres, it would be unable to economically supply suburbs with power. Shock and Awe: The Story of Electricity – 2. The Age of Invention The mid to late 1880s saw the introduction of

alternating current Alternating current (AC) is an electric current which periodically reverses direction and changes its magnitude continuously with time in contrast to direct current (DC) which flows only in one direction. Alternating current is the form in whic ...

(AC) systems in Europe and the U.S. AC power had an advantage in that

transformer A transformer is a passive component that transfers electrical energy from one electrical circuit to another circuit, or multiple circuits. A varying current in any coil of the transformer produces a varying magnetic flux in the transformer' ...

s, installed at

power station A power station, also referred to as a power plant and sometimes generating station or generating plant, is an industrial facility for the generation of electric power. Power stations are generally connected to an electrical grid. Many p ...

s, could be used to raise the voltage from the generators, and transformers at local substations could reduce voltage to supply loads. Increasing the voltage reduced the current in the transmission and distribution lines and hence the size of conductors and distribution losses. This made it more economical to distribute power over long distances. Generators (such as

hydroelectric Hydroelectricity, or hydroelectric power, is electricity generated from hydropower (water power). Hydropower supplies one sixth of the world's electricity, almost 4500 TWh in 2020, which is more than all other renewable sources combined and ...

sites) could be located far from the loads. AC and DC competed for a while, during a period called the

war of the currents The war of the currents was a series of events surrounding the introduction of competing electric power transmission systems in the late 1880s and early 1890s. It grew out of two lighting systems developed in the late 1870s and early 1880s; arc ...

. The DC system was able to claim slightly greater safety, but this difference was not great enough to overwhelm the enormous technical and economic advantages of alternating current which eventually won out. Pylône haute tension

The AC power system used today developed rapidly, backed by industrialists such as

George Westinghouse George Westinghouse Jr. (October 6, 1846 – March 12, 1914) was an American entrepreneur and engineer based in Pennsylvania who created the railway air brake and was a pioneer of the electrical industry, receiving his first patent at the age ...

with

Mikhail Dolivo-Dobrovolsky Mikhail Osipovich Dolivo-Dobrovolsky (russian: Михаи́л О́сипович Доли́во-Доброво́льский; german: Michail von Dolivo-Dobrowolsky or ''Michail Ossipowitsch Doliwo-Dobrowolski''; – ) was a Russian Empire ...

Galileo Ferraris Galileo Ferraris (31 October 1847 – 7 February 1897) was an Italian university professor, physicist and electrical engineer, one of the pioneers of AC power system and inventor of the induction motor although he never patented his work. Many ...

Sebastian Ziani de Ferranti Sebastian Pietro Innocenzo Adhemar Ziani de Ferranti (9 April 1864 – 13 January 1930) was a British electrical engineer and inventor. Personal life Sebastian Ziani de Ferranti was born in Liverpool, England. His Italian father, Cesare, was a ...

Lucien Gaulard Lucien Gaulard (16 July 1850 – 26 November 1888) invented devices for the transmission of alternating current electrical energy. Biography Gaulard was born in Paris, France in 1850. A power transformer developed by Gaulard of France and John ...

, John Dixon Gibbs,

Carl Wilhelm Siemens Sir Carl Wilhelm Siemens (4 April 1823 – 19 November 1883), anglicised to Charles William Siemens, was a German-British electrical engineer and businessman. Biography Siemens was born in the village of Lenthe, today part of Gehrden, near Ha ...

, William Stanley Jr.,

Nikola Tesla Nikola Tesla ( ; ,"Tesla"
''

Power electronics Power electronics is the application of electronics to the control and conversion of electric power. The first high-power electronic devices were made using mercury-arc valves. In modern systems, the conversion is performed with semiconducto ...

is the application of

solid-state electronics Solid-state electronics means semiconductor electronics: electronic equipment using semiconductor devices such as transistors, diodes and integrated circuits (ICs). The term is also used as an adjective for devices in which semiconductor electr ...

to the control and conversion of electric power. Power electronics started with the development of the

mercury arc rectifier Mercury commonly refers to: * Mercury (planet), the nearest planet to the Sun * Mercury (element), a metallic chemical element with the symbol Hg * Mercury (mythology), a Roman god Mercury or The Mercury may also refer to: Companies * Mercury ...

in 1902, used to convert AC into DC. From the 1920s on, research continued on applying

thyratron A thyratron is a type of gas-filled tube used as a high-power electrical switch and controlled rectifier. Thyratrons can handle much greater currents than similar hard-vacuum tubes. Electron multiplication occurs when the gas becomes ionized, p ...

s and grid-controlled mercury arc valves to power transmission. Grading electrodes made them suitable for

high voltage direct current A high-voltage direct current (HVDC) electric power transmission system (also called a power superhighway or an electrical superhighway) uses direct current (DC) for electric power transmission, in contrast with the more common alternating curre ...

(HVDC) power transmission. In 1933, selenium rectifiers were invented.

Transistor upright=1.4, gate (G), body (B), source (S) and drain (D) terminals. The gate is separated from the body by an insulating layer (pink). A transistor is a semiconductor device used to Electronic amplifier, amplify or electronic switch, switch e ...

technology dates back to 1947, with the invention of the

point-contact transistor The point-contact transistor was the first type of transistor to be successfully demonstrated. It was developed by research scientists John Bardeen and Walter Brattain at Bell Laboratories in December 1947. They worked in a group led by physicis ...

, which was followed by the

bipolar junction transistor A bipolar junction transistor (BJT) is a type of transistor that uses both electrons and electron holes as charge carriers. In contrast, a unipolar transistor, such as a field-effect transistor, uses only one kind of charge carrier. A bipola ...

(BJT) in 1948. By the 1950s, higher power semiconductor

diode A diode is a two-terminal electronic component that conducts current primarily in one direction (asymmetric conductance); it has low (ideally zero) resistance in one direction, and high (ideally infinite) resistance in the other. A diode ...

s became available and started replacing

vacuum tube A vacuum tube, electron tube, valve (British usage), or tube (North America), is a device that controls electric current flow in a high vacuum between electrodes to which an electric voltage, potential difference has been applied. The type kn ...

s. In 1956, the

silicon controlled rectifier A silicon controlled rectifier or semiconductor controlled rectifier is a four-layer solid-state current-controlling device. The name "silicon controlled rectifier" is General Electric's trade name for a type of thyristor. The principle of fo ...

(SCR) was introduced, increasing the range of power electronic applications. A breakthrough in power electronics came with the invention of the

MOSFET The metal–oxide–semiconductor field-effect transistor (MOSFET, MOS-FET, or MOS FET) is a type of field-effect transistor (FET), most commonly fabricated by the controlled oxidation of silicon. It has an insulated gate, the voltage of which d ...

(metal-oxide-semiconductor field-effect transistor) in 1959. Generations of MOSFETs enabled power designers to achieve performance and density levels not possible with bipolar transistors. In 1969,

Hitachi () is a Japanese multinational corporation, multinational Conglomerate (company), conglomerate corporation headquartered in Chiyoda, Tokyo, Japan. It is the parent company of the Hitachi Group (''Hitachi Gurūpu'') and had formed part of the Ni ...

introduced the first vertical power MOSFET, which would later be known as the

VMOS A VMOS () transistor is a type of MOSFET (metal-oxide-semiconductor field-effect transistor). VMOS is also used for describing the V-groove shape vertically cut into the substrate material. ''VMOS'' is an acronym for "vertical metal oxide semi ...

(V-groove MOSFET). The power MOSFET has since become the most common

power device A power semiconductor device is a semiconductor device used as a switch or rectifier in power electronics (for example in a switch-mode power supply). Such a device is also called a power device or, when used in an integrated circuit, a power IC. ...

in the world, due to its low gate drive power, fast switching speed, easy advanced paralleling capability, wide

bandwidth Bandwidth commonly refers to: * Bandwidth (signal processing) or ''analog bandwidth'', ''frequency bandwidth'', or ''radio bandwidth'', a measure of the width of a frequency range * Bandwidth (computing), the rate of data transfer, bit rate or thr ...

, ruggedness, easy drive, simple biasing, ease of application, and ease of repair. While HVDC is increasingly being used to transmit large quantities of electricity over long distances or to connect adjacent asynchronous power systems, the bulk of electricity generation, transmission, distribution and retailing takes place using alternating current.

Organization

The electric power industry is commonly split up into four processes. These are

electricity generation Electricity generation is the process of generating electric power from sources of primary energy. For electric utility, utilities in the electric power industry, it is the stage prior to its Electricity delivery, delivery (Electric power transmi ...

such as a

electric power transmission Electric power transmission is the bulk movement of electrical energy from a generating site, such as a power plant, to an electrical substation. The interconnected lines that facilitate this movement form a ''transmission network''. This is ...

electricity distribution Electric power distribution is the final stage in the delivery of electric power; it carries electricity from the transmission system to individual consumers. Distribution substations connect to the transmission system and lower the transmissio ...

and

electricity retailing Electricity retailing is the final sale of electricity from generation to the end-use consumer. This is the fourth major step in the electricity delivery process, which also includes generation, transmission and distribution. Beginnings Electric ...

. In many countries, electric power companies own the whole infrastructure from generating stations to transmission and distribution infrastructure. For this reason, electric power is viewed as a

. The industry is generally heavily

regulated Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. Fo ...

, often with

price control Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of good ...

s and is frequently government-owned and operated. However, the modern trend has been growing deregulation in at least the latter two processes. The nature and state of market reform of the

electricity market In a broad sense, an electricity market is a system that facilitates the exchange of electricity-related goods and services. During more than a century of evolution of the electric power industry, the economics of the electricity markets had un ...

often determines whether electric companies are able to be involved in just some of these processes without having to own the entire infrastructure, or citizens choose which components of infrastructure to patronise. In countries where electricity provision is deregulated, end-users of electricity may opt for more costly

green electricity Low-carbon power is electricity produced with substantially lower greenhouse gas emissions than conventional fossil fuel power generation. The energy transition to low-carbon power is one of the most important actions required to limit climate ...

Generation

All forms of electricity generation have positive and negative aspects.

Technology Technology is the application of knowledge to reach practical goals in a specifiable and reproducible way. The word ''technology'' may also mean the product of such an endeavor. The use of technology is widely prevalent in medicine, science, ...

will probably eventually declare the most preferred forms, but in a market economy, the options with less overall costs generally will be chosen above other sources. It is not clear yet which form can best meet the necessary energy demands or which process can best solve the demand for electricity. There are indications that

renewable energy Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...

is rapidly becoming the most viable in economic terms. A diverse mix of generation sources reduces the risks of electricity price spikes.

Electric power transmission

Electric power transmission is the bulk movement of electrical energy from a generating site, such as a

power plant A power station, also referred to as a power plant and sometimes generating station or generating plant, is an industrial facility for the generation of electric power. Power stations are generally connected to an electrical grid. Many pow ...

, to an electrical substation. The interconnected lines which facilitate this movement are known as a transmission network. This is distinct from the local wiring between high-voltage substations and customers, which is typically referred to as

electric power distribution Electric power distribution is the final stage in the delivery of electric power; it carries electricity from the transmission system to individual consumers. Distribution substations connect to the transmission system and lower the transmissi ...

. The combined transmission and distribution network is known as the "

power grid An electrical grid is an interconnected network for electricity delivery from producers to consumers. Electrical grids vary in size and can cover whole countries or continents. It consists of:Kaplan, S. M. (2009). Smart Grid. Electrical Power ...

" in

North America North America is a continent in the Northern Hemisphere and almost entirely within the Western Hemisphere. It is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South America and the Car ...

, or just "the grid". In the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...

Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...

and

New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...

, the network is known as the National Grid. A

wide area synchronous grid A wide area synchronous grid (also called an "interconnection" in North America) is a three-phase electric power grid that has regional scale or greater that operates at a synchronized utility frequency and is electrically tied together during ...

, also known as an "interconnection" in North America, directly connects many generators delivering AC power with the same relative ''frequency'' numerous consumers. For example, there are four major interconnections in North America (the

Western Interconnection The Western Interconnection is a wide area synchronous grid and one of the two major alternating current (AC) power grids in the North American power transmission grid. The other major wide area synchronous grid is the Eastern Interconnection ...

, the

Eastern Interconnection The Eastern Interconnection is one of the two major alternating-current (AC) electrical grids in the North American power transmission grid. The other major interconnection is the Western Interconnection. The three minor interconnections ...

, the

Quebec Interconnection Quebec ( ; )According to the Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is one of the thirteen p ...

and the

Electric Reliability Council of Texas The Electric Reliability Council of Texas, Inc. (ERCOT) is an American organization that operates Texas's electrical grid, the Texas Interconnection, which supplies power to more than 25 million Texas customers and represents 90 percent of the s ...

(ERCOT) grid). In Europe one large grid connects most of continental Europe. Historically, transmission and distribution lines were owned by the same company, but starting in the 1990s, many countries have liberalized the regulation of the

in ways that have led to the separation of the electricity transmission business from the distribution business.

Electric power distribution

Electric power distribution is the final stage in the delivery of

; it carries electricity from the

transmission system :''See Transmission (mechanics) for a car's transmission system'' In telecommunications, a transmission system is a system that transmits a signal from one place to another. The signal can be an electrical, optical or radio signal. Some transmissi ...

to individual consumers. Distribution substations connect to the transmission system and lower the transmission voltage to medium

ranging between 2 kV and 35 kV with the use of

s. ''Primary'' distribution lines carry this medium voltage power to

distribution transformer Single-phase distribution transformer in Canada A distribution transformer or service transformer is a transformer that provides the final voltage transformation in the electric power distribution system, stepping down the voltage used in the di ...

s located near the customer's premises. Distribution transformers again lower the voltage to the

utilization voltage Mains electricity or utility power, power grid, domestic power, and wall power, or in some parts of Canada as hydro, is a general-purpose alternating-current (AC) electric power supply. It is the form of electrical power that is delivered to h ...

used by lighting, industrial equipment or household appliances. Often several customers are supplied from one transformer through ''secondary'' distribution lines. Commercial and residential customers are connected to the secondary distribution lines through

service drop In electric power distribution, a service drop is an overhead electrical line running from a utility pole, to a customer's building or other premises. It is the point where electric utilities provide power to their customers.Carson Dunlop "El ...

s. Customers demanding a much larger amount of power may be connected directly to the primary distribution level or the subtransmission level.

Electric retailing

Electricity retailing is the final sale of

electricity Electricity is the set of physical phenomena associated with the presence and motion of matter that has a property of electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as described ...

from

to the end-use consumer.

World electricity industries

The organization of the electrical sector of a country or region varies depending on the economic system of the country. In some places, all electric power generation, transmission and distribution is provided by a government controlled organization. Other regions have private or investor-owned utility companies, city or municipally owned companies,

cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...

companies owned by their own customers, or combinations. Generation, transmission and distribution may be offered by a single company, or different organizations may provide each of these portions of the system. Not everyone has access to grid electricity. About 840 million people (mostly in Africa) had no access in 2017, down from 1.2 billion in 2010.

Market reform

The

business model A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...

behind the electric utility has changed over the years playing a vital role in shaping the electricity industry into what it is today; from generation, transmission, distribution, to the final local retailing. This has occurred prominently since the reform of the electricity supply industry in England and Wales in 1990.

United States

In 1996 - 1999 the

Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce and regulates the transportation of oil by pipeline in ...

(FERC) made a series of decisions which were intended to open the U.S. wholesale power market to new players, with the hope that spurring competition would save consumers $4 to $5 billion per year and encourage technical innovation in the industry. Steps were taken to give all market participants open access to existing interstate transmission lines.
Order No. 888
ordered vertically integrated electric utilities to functionally separate their transmission, power generation and marketing businesses to prevent self-dealing.
Order No. 889
set up a system to provide all participants with timely access to information about available transmission capacity and prices. * The FERC also endorsed the concept of appointing independent system operators (ISOs) to manage the electric power grid - a function that was traditionally the responsibility of vertically integrated electric utility companies. The concept of an independent system operator evolved into that of regional transmission organizations (RTOs). FERC's intention was that all U.S. companies owning interstate electric transmission lines would place those facilities under the control of an RTO. In it
Order No. 2000
''(Regional Transmission Organizations)'', issued in 1999, FERC specified the minimum capabilities that an RTO should possess. These decisions, which were intended to create a fully interconnected grid and an integrated national power market, resulted in the restructuring of the U.S. electricity industry. That process was soon dealt two setbacks: the California energy crisis of 2000, and the Enron scandal and collapse. Although industry restructuring proceeded, these events made clear that competitive markets could be manipulated and thus must be properly designed and monitored. Furthermore, the Northeast blackout of 2003 highlighted the need for a dual focus on competitive pricing and strong reliability standards.

Other countries

In some countries, wholesale electricity markets operate, with generators and

retailers Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...

trading electricity in a similar manner to shares and

currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...

. As

deregulation Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a ...

continues further, utilities are driven to sell their

asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value ...

s as the energy market follows in line with the gas market in use of the

futures Futures may mean: Finance *Futures contract, a tradable financial derivatives contract *Futures exchange, a financial market where futures contracts are traded * ''Futures'' (magazine), an American finance magazine Music * ''Futures'' (album), a ...

and

spot market The spot market or cash market is a public financial market in which financial instruments or commodities are traded for immediate delivery. It contrasts with a futures market, in which delivery is due at a later date. In a spot market, settle ...

s and other financial arrangements. Even

globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...

with foreign purchases are taking place. One such purchase was when the UK's National Grid, the largest private electric utility in the world, bought several electric utilities in

New England New England is a region comprising six states in the Northeastern United States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. It is bordered by the state of New York to the west and by the Canadian provinces ...

for $3.2 billion. Between 1995 and 1997, seven of the 12 Regional Electric Companies (RECs) in England and Wales were bought by U.S. energy companies."Electricity companies in the United Kingdom – a brief chronology," Electricity Association, 30 June 2003
/ref> Domestically, local electric and gas firms have merged operations as they saw the advantages 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 Spaceflight (or space flight) is an application of astronautics to fly spacecraft into or through outer space, either with or without humans on board. Most spaceflight is uncrewed and conducted mainly with spacecraft such as satellites in ...

; aeroderivative

gas turbine A gas turbine, also called a combustion turbine, is a type of continuous flow internal combustion engine. The main parts common to all gas turbine engines form the power-producing part (known as the gas generator or core) and are, in the directi ...

s used in

jet aircraft A jet aircraft (or simply jet) is an aircraft (nearly always a fixed-wing aircraft) propelled by jet engines. Whereas the engines in propeller-powered aircraft generally achieve their maximum efficiency at much lower speeds and altitudes, je ...

; solar engineering and

photovoltaic Photovoltaics (PV) is the conversion of light into electricity using semiconducting materials that exhibit the photovoltaic effect, a phenomenon studied in physics, photochemistry, and electrochemistry. The photovoltaic effect is commercially us ...

systems; off-shore wind farms; and the communication advances spawned by the digital world, particularly with microprocessing which aids in monitoring and dispatching.Borberly, A. and Kreider, J. F. (2001). Distributed Generation: The Power Paradigm for the New Millennium. CRC Press, Boca Raton, FL. 400 pp.

Outlook

Electricity is expected to see growing

demand In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...

in the future. The

Information Revolution The term information revolution describes current economic, social and technological trends beyond the Industrial Revolution. Many competing terms have been proposed that focus on different aspects of this societal development. The British polymat ...

is highly reliant on electric power. Other growth areas include emerging new electricity-exclusive technologies, developments in space conditioning,

industrial process Industrial processes are procedures involving chemical, physical, electrical or mechanical steps to aid in the manufacturing of an item or items, usually carried out on a very large scale. Industrial processes are the key components of heavy in ...

es, and

transportation Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, ...

(for example hybrid vehicles,

locomotive A locomotive or engine is a rail transport vehicle that provides the Power (physics), motive power for a train. If a locomotive is capable of carrying a payload, it is usually rather referred to as a multiple unit, Motor coach (rail), motor ...

s).