From power station to you: getting a grip on the electricity grid
Most of us know that electricity is produced at a power station and travels through a grid, but the finer details are a bit of a mystery. The very word ‘grid’ is shorthand for a complex system of electricity transportation that ends at your light switch or power point. So, to help you get a grip on the grid, we’ve come up with this handy guide.
The term ‘grid’ is used to describes the main players in the supply of electricity — generators, transmitters, distributors and retailers — and the network of infrastructure that connects them. Each plays a part in the journey of electricity from the power station to your home or business.
Generators make electricity and send it into the grid. In Australia, around 90% percent of electricity is generated by coal or gas fired power stations, with hydro, wind and solar power making up the balance.
A transformer converts the electricity generated by the power station from low to high voltage, which means it can be transported efficiently through the transmission lines.
These transport the high voltage electricity across the long distances from the power stations to the towns, cities and dwellings where the electricity is required.
Substation transformers convert high voltage electricity to low voltage for distribution through power lines to consumers.
These are the power lines that transport the low voltage electricity to you, so you can access it with the flick of a switch.
The National Energy Market (NEM)
You might be wondering how a system with so many different participants — both public and private — and such an extensive network of lines and cables is overseen. The answer is the NEM, and its regulative body, the Australian Energy Market Commission (AEMC).
The NEM is a wholesale market that buys from the generators and sells to the retailers, who then on-sell the electricity to you. As with all markets, supply and demand affects prices so, for example, if demand is up, prices will rise as well. Generators, however, compete to sell electricity onto the market at the best price, which keeps the cost of electricity from rising excessively during periods of high demand.
Such periods of high demand have included extreme hot weather events, which place a strain on the grid and have been known to cause power outages, resulting in consumer frustration. To address this, the federal government established the Australian Energy Market Operator (AEMO), which also monitors electricity usage patterns and manages the dispatch process so there is always enough electricity to meet demand.