Electrical grid

The term grid usually refers to a network. An electrical grid (also referred to as an electricity grid or electric grid) is an interconnected network for delivering electricity from suppliers to consumers. It consists of generating stations that produce electrical power, high-voltage transmission lines that carry power from distant sources to demand centres, and distribution lines that connect individual customers. In the early 19th century, electricity was a novel invention. With this, electric utilities took advantage of economies of scale and moved to centralized power generation, distribution, and system management.

Evolution of Electrical grid in US

In the early days of electricity, energy systems were small and localized. The Pearl Street Station in New York City, launched on September 4th, 1882, was the world’s first electric power distribution system in New York City, which provided direct current (DC) for customers in the Wall Street area at a price of about $5 per kilowatt hour (kWh). Soon, many similar self-contained, isolated systems were built across the country.

The first alternating current distribution system was installed in 1886 and thus step-up and step-down concept of voltage level was implemented. Around the same era, the idea of economies of scale began to be applied to the electrical industry. It became more and more apparent that a large centralized power plant was much more efficient (and cheaper) at providing electricity over a wide area than a small power plant was at providing electricity over a small area. All of the companies competing in this market at this time were all privately owned, and un-regulated. They understood economies of scale, and so they looked for places where they could build large electricity generating plants and where they could serve the most number of people with those power plants. Even though it was technically feasible to send electricity over long distances, it was still expensive to build those wires over long distances.

By the 1930s regulated electric utilities became well-established, providing all three major aspects of electricity, the power plants, transmission lines, and distribution. This type of electricity system, a regulated monopoly, is called a vertically-integrated utility. Bigger transmission lines and more remote power plants were built, and transmission systems became significantly larger, crossing many miles of land and even state lines.

As electricity became more widespread, larger plants were constructed to provide more electricity, and bigger transmission lines were used to transmit electricity from farther away. In 1978 the Public Utilities Regulatory Policies Act was passed, making it possible for power plants owned by non-utilities to sell electricity too, i.e., opening the door to privatization.

By the 1990s, the government was completely in support of open access of the electricity transmission grid to everyone, not only the vertically-integrated utilities. The vertically-integrated utilities didn’t want competition and prevent outsiders from using their transmission lines, so the government stepped in and created rules to force open access to the lines, and setup Independent System Operators, not-for-profit entities that managed the transmission of electricity in different regions.

It is clear from discussion, the evolution of electric power system or grid has started from the small cluster of customers served by Edison’s Pearl Street Station in 1882 to a nationwide system of systems that delivers electricity to cities and towns throughout the country.

Evolution of electric grid in India

The first demonstration of electric light in Calcutta was conducted on 24 July 1879 by P W Fleury & Co. After the success of electricity in Calcutta, power was thereafter introduced in Bombay in 1882 at Crawford Market and Bombay Electric Supply & Tramways Company (BEST) set up a generating station in 1905 to provide electricity for the tramway. The first hydroelectric installation in India was installed at Sidrapong for the Darjeeling Municipality in 1897. The first electric train ran between Bombay’s Victoria Terminus and Kurla along the Harbour Line, in 1925. In 1931, electrification of the metre gauge track between Madras Beach and Tambaram was started.

The power sector in India has undergone significant progress after Independence. When India became independent in 1947, the country had a power generating capacity of 1,362 MW. Hydro power and coal based thermal power have been the main sources of generating electricity. Generation and distribution of electrical power was carried out primarily by private utility companies. After 1947, the first electricity act was Electricity (Supply) Act, 1948 that elaborate institutional frame work and financing norms of the performance of the electricity industry in the country. The Act envisaged creation of State Electricity Boards (SEBs) for planning and implementing the power development programmes in their respective States. The Act also provided for creation of central generation companies for setting up and operating generating facilities in the Central Sector. The Central Electricity Authority constituted under the Act is responsible for power planning at the national level. The Industrial Policy Resolution of 1956 envisaged the generation, transmission and distribution of power almost exclusively in the public sector. As a result of this Resolution and facilitated by the Electricity (Supply) Act, 1948, the electricity industry developed rapidly in the State Sector.

The first thermal power plant was Bokaro thermal power plant, first in Asia, commissioned in 1962. India's first nuclear power plant was commissioned in 1972 in Rajasthan. From, the Fifth Plan onwards i.e. 1974-79, the Government of India got itself involved in a big way in the generation and bulk transmission of power to supplement the efforts at the State level and took upon itself the responsibility of setting up large power projects to develop the coal and hydroelectric resources in the country as a supplementary effort in meeting the country’s power requirements. In spite of the overall development that has taken place, the power supply industry has been under constant pressure to bridge the gap between supply and demand. The National thermal Power Corporation (NTPC) and National Hydro-electric Power Corporation (NHPC) were set up for these purposes in 1975. North-Eastern Electric Power Corporation (NEEPCO) was set up in 1976 to implement the regional power projects in the North-East. Subsequently two more power generation corporations were set up in 1988 viz. Tehri Hydro Development Corporation (THDC) and Nathpa Jhakri Power Corporation (NJPC).

To construct, operate and maintain the inter-State and interregional transmission systems the National Power Transmission Corporation (NPTC) was set up in 1989. The corporation was renamed as POWER GRID in 1992.

For the purpose of distancing state governments from tariff determination, The Electricity Regulatory Commissions Act was enacted in 1998. So as to reform electricity sector further by participation of private sector and to bring in competition, Electricity Act was enacted in 2003.

The electricity sector in India had an installed capacity of 308.83 GW (November 2016). India became the world’s third largest producer of electricity in the year 2013 with 4.8% global share in electricity generation surpassing Japan and Russia. Renewable Power plants constituted 28.43% of total installed capacity and Non-Renewable Power Plants constituted the remaining 71.57%. As of March 2013, the per capita total electricity consumption in India was 917.2 kWh. The per capita electricity consumption is lower compared to many countries despite cheaper electricity tariff in India. Electric energy consumption in agriculture is highest (18%) in India.