Energy 101

Understanding the Electrical Grid: From Power Sources to Distribution Centers

How Does the Electrical Grid Work?

Until the power goes out, no one gives a second thought about the electrical grid. Yet, the 21st century could not exist without power. This is why having a basic understanding of where your power comes from and what you are paying for can help you better understand, and reduce, your monthly power bill. Plus, you can make informed clean energy decisions on your own.

There are only four components to the power grid. And their layout is simple.

  1. Power Sources – where energy is generated
  2. Transformers – where energy is converted to electrical power
  3. Transmission lines – getting that electricity to places hundreds of miles away
  4. Distribution centers – the network of transformers, lines and electrical infrastructure, that sends power to your home.
  5. Power Sources – Where it All Begins

A power source is any facility that generates electricity from other forms of energy. The facilities are designed to convert solar, wind, hydro, natural gas, nuclear and coal power to electricity. Utility Companies typically own the power source in your area. Worth noting, that utility companies are separate from your local distributors and both facilities charge you separately.

These power sources and the utility companies that own them are all regulated by state-appointed committees known as Public Utility Commissions (PUCs) or Public Service Commissions (PSCs). PUCs and PSCs determine where and when new generators – meaning new wind farms and new solar projects – can be built.

Transformers – Turning Energy Into Power

Energy from power sources is then sent to transformers, which converts the electricity into a lower voltage for you to use.

How the Electrical Grid Works

Transmission Lines – How Power Travels

After electricity is generated, it needs to make it to your home. Electricity is always transmitted from a power source in either one of two ways: through overhead power lines or underground power cables, and always at a high voltage. These transmission lines are also usually owned by utility companies, but there are outside organizations, such as Independent System Operators (ISOs) or Regional Transmission Organizations (RTOs), which regulate the market.

Once power has made it to the transmission lines, it is simply an electron. At that point, it’s nearly impossible to discern whether that electron came from a wind farm, solar farm, coal plant or nuclear generator. This is why tracking “usage” of renewable energy in the U.S. is a complicated process.

Distribution Centers – When Power Hits Home

Transmission lines end at distribution centers, which then send power to your home! This network of power sources, transformers, transmission lines, and distribution centers make up the entirety of the electrical grid. But you’re probably wondering if the energy making it to my home comes from a distribution center, how do I know what power source that energy originally came from?

So, Where Does my Power Actually Come From?

Coal and natural gas, as well as nuclear, have always been the backbone of the power grid, but with the advancements in clean energy technology, that foundation is now shifting. It’s nearly impossible to track where your energy comes from, and most utilities in the U.S. still rely heavily on putting fossil fuel power sources into the power grid.

How Can I Get Access to Clean Energy?

Now that you know about the grid, how can you support clean energy? Most people think that to support clean energy, you have to install a solar panel on your roof. That’s not the case at all!

Fortunately, there is a way you can make sure your energy usage is increasing demand for renewable energy. Renewable energy certificates (RECs) were created to track and monetize megawatt-hours (MWh) produced by renewable power sources. These RECs can be transferred, bought and sold in order to provide evidence of the production of a quantity of renewable energy. When your monthly KwH usage is invested in RECs, you are ensuring that an equal amount of renewable energy is making onto the power grid!

Also check out The Ultimate Guide to Lowering Your Electric Bill!