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Is the Electrical Power Industry as Simple as it Seems?

In the modern world, daily life would practically come to a standstill if there were no electric power supply. Name any activity in our day-to-day living and the underlying driving force behind that particular activity would be electricity. 

Electricity has penetrated so much in our lifestyles that we can understand how electricity is intricately involved in it, right from the time we wake up to the beautiful aroma of coffee to the time we go back to sleep in a correct temperature-controlled bedroom.

 Electricity as a Commodity

When any particular aspect whether tangible or intangible becomes a thing of demand for mass consumption then many individuals perceive it as a commodity for business for earning profits. Electricity is no different. While electric current was discovered in 1880 by Volta, it was not until 1882 when the electricity business finally began spreading its wings.  The commercialization of electric current was pioneered by none other than the great Thomas Edison.

The modern electricity industry functions in four definite stages. They are:

Generation: As the name suggests, generation is the production of electric power by harnessing various energy sources like coal, natural gas, water, wind, nuclear, solar, biofuel, petroleum, etc.

Transmission: This process involves bulk transferring the generated power from the generation site, i.e. the power plan to the main electric substation, so the distribution can happen.

Distribution: Distribution differs from transmission in two different ways- the transfer is from an electric substation to the end-users and it does not happen at a bulk rate.

Retailing: This stage is independent of the three stages and does not interfere with the electricity supply. It deals with the monetary part of the electric power business where the electric company collected bills from the customers.

The Complexity of the Power Industry

To an unassuming individual, the power generation and supply industry would seem a simple deal. The price for the generation of electricity and the maintenance of the varied equipment along with a certain profit percentage would form the money-rolling mechanism of the business. 

However, this entirely is not the case. Therefore, to answer the question asked in the very beginning, it would be a simple no for the dealings of the energy business sector is not black and white and is dependent on various factors.

During the early days of the electricity industry, there were multiple accidents and mishaps due to the hazardous nature of the commodity. Therefore, after long interventions and research, many safety features were introduced in this industry to function properly and continue serving the masses. These safety regulations have been introduced on both international and domestic levels.

The other major factor that heavily dictates this business is the domestic economy. Since the production is dependent on either natural or renewable resources of the said country, their production is largely dependent on the financial and economic condition of the county. E.g. a country might have large coal reserves but if the economy were not strong enough to produce, then the power sector would not flourish as well.

One thought on “Is the Electrical Power Industry as Simple as it Seems?

  1. Looks like PS&G is done digging up North Pleasant.

    I see lines on the Glen Avenue so that must be next.

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