Inside the power system

The availability of electric power has become a vast enabler for human beings, yet has also fostered a massive dependency. While food and clean water have been a fundamental requirement for millennia, electric power has become a recent essential in homes, factories, offices, hospitals. When the power blacks out, countless human activities now halt in an instant.

It is quite remarkable how far the process of generating electricity has come in the past 130 years, since the invention of the electric generator and the incandescent light bulb enabled Thomas Edison set up the first-ever electric company. Supplying electric lighting to the offices of New York's Wall Street, his business provided local generation for local customers – a model that was replicated in many other towns and cities in many parts of the world. there were no transmission lines in those days, just small, coal-fired steam generators providing power on a local system.

Since then the system has grown in complexity and scale. An extra level of complexity was added when, in the 1980s, the process of liberalizing the electric power industry began in many industrialised countries. Gradually this has separated the generators, the transmission system operators (TSOs) who run the high-voltage grids, the distribution service operators (DSOs) who manage the delivery of consumer-voltage power to customers, and the power sellers. Many power companies are both generators and retailers of electricity.

Electricity is more of a will o' the wisp than a commodity. It can't be 'held' somewhere in a storage tank or reservoir. It is generated, and used, in a second. transmission system operators (TSOs) – who have little control over demand – have the remarkable task of matching supply to meet whatever demand might be at any moment of the day, or night, during winter and summer alike.

TSOs are like conductors of the 'orchestra' of power supply, bringing in one section of the orchestra and quietening another; or are like controllers of traffic at a busy and complex intersection. What they are doing is matching supply to demand – without ever being absolutely certain what demand will be. Of course, consumption patterns have been recorded and analysed, so the TSOs know broadly what to expect, and when. Forecasting of demand has become a sophisticated business, especially as it also underlies the prices at which electricity is bought and sold.

Large scale coal and nuclear plants are usually 500-1,000 MW or more, and have little flexibility in their output – regardless of the demand. Hydro is supremely controllable, constantly 'willing' to release the vast energy of water that wants to obey the law of gravity, but with the supply of water to its turbines fully adjustable. Gas-fired generation can also offer a quick response to match demand.

It is the peaks of power demand that are trickiest for TSOs to handle. In order to maintain voltage within the system they may have to call on every available resource, especially if neighbouring operators have no spare power that can be brought in via the 'interconnectors' between different grid systems. This can mean bringing some plant out of semi-retirement, or calling on diesel generator sets. This 'peaking' or 'peaker' power can often be most among the most polluting, and expensive to run. In open markets it can also command a high price.