Electric power 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.
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].
Although electricity had been known to be produced as a result of the chemical reactions that take place in an electrolytic cell since Alessandro Volta developed the voltaic pile in 1800, its production by this means was, and still is, expensive.
In 1831, Michael Faraday 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, Thomas Edison developed and sold a commercially viable replacement for gas lighting and heating using locally generated and distributed direct current electricity.
Robert Hammond, in December 1881, demonstrated the new electric light in the Sussex town of Brighton 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.
In early 1882, Edison opened the world's first steam-powered electricity generating station at Holborn Viaduct in London, where he had entered into an agreement with the City Corporation for a period of three months to provide street lighting.
It was later on in the year in September 1882 that Edison opened the Pearl Street Power Station in New York City and again it was a DC supply.
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.
[1] The AC power system used today developed rapidly, backed by industrialists such as George Westinghouse with Mikhail Dolivo-Dobrovolsky, Galileo Ferraris, Sebastian Ziani de Ferranti, Lucien Gaulard, John Dixon Gibbs, Carl Wilhelm Siemens, William Stanley Jr., Nikola Tesla, and others contributed to this field.
Primary energy sources for these machine are often fossil fuels (coal, oil, natural gas), nuclear fission, geothermal steam, or falling water.
For example, low-incremental-cost generation sources such as nuclear power plants may be run continually to meet the average "base load" of the connected system, whereas more costly peaking power plants such as natural gas turbines may be run for brief times during the day to meet peak loads.
Alternatively, load management strategies may encourage more even demand for electrical power and reduce costly peaks.
A wide area synchronous grid, also known as an "interconnection" in North America, directly connects many generators delivering AC power with the same relative frequency numerous consumers.
In 1996 – 1999 the Federal Energy Regulatory Commission (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.
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.
Although industry restructuring proceeded, these events made clear that competitive markets could be manipulated and thus must be properly designed and monitored.
[23] 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; aeroderivative gas turbines used in jet aircraft; solar engineering and photovoltaic systems; off-shore wind farms; and the communication advances spawned by the digital world, particularly with microprocessing which aids in monitoring and dispatching.
Other growth areas include emerging new electricity-exclusive technologies, developments in space conditioning, industrial processes, and transportation (for example hybrid vehicles, locomotives).
