Electricity and Magnetism - Power Explained

Types of electricity include static electricity and current electricity, which flows as direct current (DC) or alternating current (AC). Electricity can be generated from various sources, including solar, wind, and hydro, but all supply either static or current electricity.

What are the Types of Electricity?

There are two types of electricity: Static Electricity and Current Electricity.

✅ Static electricity results from the buildup of electric charges.

✅ Current electricity includes alternating (AC) and direct (DC) flow.

Static Electricity is made by rubbing together two or more objects, creating friction, while Current electricity is the flow of electric charge across an electrical field.

Static Electricity

Static electricity is when electrical charges build up on the surface of a material. It is usually caused by rubbing materials together. The result of a build-up of static electricity is that objects may be attracted to each other or may even cause a spark to jump from one to the other. For Example, rub a balloon on a wool and hold it up to the wall.

Before rubbing, like all materials, the balloons and the wool sweater have a neutral charge. This is because they each have an equal number of positively charged subatomic particles (protons) and negatively charged subatomic particles (electrons). When you rub the balloon with the wool sweater, electrons are transferred from the wool to the rubber because of differences in the attraction of the two materials for electrons. The balloon becomes negatively charged because it gains electrons from the wool, and the wool becomes positively charged because it loses electrons.

Current Electricity

Current is the rate of flow of electrons. The movement of electrons produces it, and it is measured in amperes. Unlike static electricity, current electricity must flow through a conductor, usually copper wire. Electricity is similar to the flow of water in a river. The river flows from one spot to another, and the speed of the current determines the speed at which it moves. With electricity, current is a measure of the amount of energy transferred over a period of time. That energy is referred to as an electron flow. One of the results of the current is the heating of the conductor. When an electric stove heats up, it's because of the flow of current.

There are various sources of current electricity, including the chemical reactions that occur in a battery. The most common source is the generator. A simple generator produces electricity when a coil of copper turns inside a magnetic field. In a power plant, electromagnets spinning inside many coils of copper wire generate vast quantities of electricity.

There are two main kinds of electric current. Direct (DC) and Alternating (AC). It's easy to remember. Direct current is similar to the energy you obtain from a battery. Alternating current is like the plugs in the wall. The big difference between the two is that DC is a flow of energy, while AC can turn on and off. AC reverses the direction of the electrons.

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Sources of electricity include fossil fuels, nuclear power, and renewable energy like solar, wind, and hydro. These energy sources provide reliable electricity generation, powering homes, industries, and grids while shaping modern energy systems and sustainability goals.

What are the Sources of Electricity?

Sources of electricity are the various energy systems used to generate electrical power, ranging from conventional fuels to renewable technologies.

✅ Include fossil fuels, nuclear power, and renewable energy

✅ Used in electricity generation across all sectors

✅ Impact cost, sustainability, and environmental footprint

In the modern world, electricity plays a crucial role in our daily lives. As a result, it has become an essential commodity, from powering our homes to running industries. But have you ever wondered where it comes from? Electric power can be generated from various sources with unique characteristics, benefits, and drawbacks. In this article, we'll delve into the main sources of electric power generation and discuss their environmental impacts, costs, and efficiency. Renewable sources, such as hydro, solar, and wind, contrast with alternative electricity options that aim to reduce dependence on fossil fuels.

The primary sources of electric power used to produce electric power can be broadly categorized into renewable and non-renewable resources. Renewable energy sources, such as solar, wind, hydroelectric, geothermal, and biomass, are replenished naturally and have a lower environmental impact than non-renewable sources. Non-renewable energy sources include fossil fuels such as coal, natural gas, and oil, as well as nuclear energy. These resources are finite, and their extraction and utilization contribute to environmental issues like air pollution and climate change. Hydroelectric dams, wind turbines, and solar farms all contribute to global electricity generation, reducing reliance on non-renewable sources.

According to the U.S. Energy Information Administration, global electricity production relies on a mix of renewable and non-renewable sources. While traditional thermal power plants, fueled by coal, natural gas, and nuclear energy, remain central to electricity generation, the rapid growth of solar photovoltaics is transforming how we create and consume electricity. Many nations are investing heavily in utility-scale electricity projects, from massive solar farms to offshore wind facilities, to meet rising demand while reducing emissions. These shifts illustrate how diverse technologies collectively shape the future of reliable and sustainable power.

Fossil Fuels: The Traditional Backbone

Fossil fuels remain the dominant source of electricity worldwide. In 2023, they accounted for roughly 61% of global power generation. In the U.S., about 60% of electric power still comes from coal, natural gas, and oil. These fuels are burned to produce heat, which converts water into steam that drives turbines to generate electric power.

While fossil fuels offer reliability and established infrastructure, they release large amounts of greenhouse gases, contributing significantly to air pollution and climate change.

Nuclear Energy: Low Carbon but Controversial

Nuclear energy provides approximately 9% of the world's electric power and nearly 19% in the United States. It works by splitting atoms (nuclear fission) to release energy that turns water into steam, which then drives turbines.

Nuclear power is highly efficient and emits no carbon during operation. However, it poses concerns regarding radioactive waste, high capital costs, and the potential for catastrophic failures.

Renewable Energy: The Fastest-Growing Sector

Renewable energy sources are expanding rapidly due to technological advances and falling costs. In 2023, they accounted for approximately 30% of global electric power, with wind and solar energy experiencing the fastest growth. Among renewables, Geothermal Electricity harnesses Earth’s internal heat to produce reliable baseload power even in regions with limited solar or wind potential.

Solar Power

Solar energy converts sunlight into electric power using photovoltaic cells, also known as photovoltaic panels. It's scalable, from rooftop systems to massive solar farms, and has seen significant cost reductions over the past decade.

Wind Power

Wind turbines capture kinetic energy from the wind to generate electric power. Wind farms are increasingly common in the U.S., Europe, and China. Like solar energy, wind energy is intermittent, but storage technology is continually improving.

Hydroelectric Power

Hydroelectricity uses flowing water to turn turbines. It's the most established renewable source and provides reliable base-load power. However, large dams can disrupt ecosystems and displace communities. Hydroelectricity stands out as a mature and stable form of renewable generation, as detailed on our Hydroelectricity page.

Geothermal and Biomass

Geothermal taps into Earth’s internal heat, while biomass burns organic material. While smaller in scale, both contribute to energy diversity and localized solutions. Geothermal power generation complements solar, wind, and hydroelectric sources by offering a steady, round-the-clock output, as explained in our detailed guide on Geothermal Electricity.

Comparing Sources of Electricity

The diverse world of electric power choices offers a range of technologies that can help meet the growing global demand for energy. By understanding the characteristics, environmental impacts, costs, and efficiencies of these sources, we can make informed decisions about transitioning to cleaner, more sustainable energy systems. As renewable energy technologies continue to advance and energy storage solutions mature, the future of electric power generation is likely to be increasingly dominated by clean, sustainable sources that reduce our impact on the planet and provide reliable power for future generations.

Environmental Impact and Efficiency

The environmental effects of each source vary significantly:

• Coal and oil are the dirtiest, producing the most CO2 and pollutants.

• Natural gas emits less CO2 but still contributes to climate change.

• Nuclear has a low operational footprint but long-term waste issues.

• Solar and wind energy produce no emissions during use, although manufacturing has some environmental impact.

Efficiency also differs:

• Natural gas plants can achieve thermal efficiencies exceeding 60%.

• Nuclear reactors are highly efficient, but they are slow to build.

• Coal is among the least efficient.

• Renewables vary based on technology and location.

Cost Considerations

Costs are influenced by technology, fuel, geography, and infrastructure:

• Solar and wind costs have dropped dramatically, making them competitive with fossil fuels.

• Nuclear has high upfront costs but low operating costs.

• Fossil fuels fluctuate in response to changes in market supply and demand.

Future Trends in Power Generation

The energy sector is moving toward decarbonization. Key trends include:

• Growth in solar and wind capacity

• Advances in energy storage systems

• Development of smart grids and microgrids

• Investment in fusion energy research

Many countries are setting net-zero goals, aiming for cleaner and more sustainable electricity systems.

Electric power can be generated from various sources, each with its trade-offs in terms of cost, efficiency, and environmental impact. While fossil fuels still dominate, the momentum is clearly shifting toward renewable energy sources. A diversified energy mix, supported by smart technologies and forward-looking policies, will power the sustainable future. To understand how energy sources are converted into power, refer to our 'Generate Electricity' article, which describes the entire process from fuel or resource to grid delivery.

Understanding the strengths and weaknesses of each source helps shape a more resilient, efficient, and eco-friendly power generation landscape. Whether from fossil fuels, nuclear, or renewables, every source of electricity must connect to the electricity grid to deliver power where it is needed.

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Generate electricity via power generation methods: generators, turbines, photovoltaics, fuel cells, and microgrids; optimized by inverters, AC/DC conversion, smart grid control, energy storage, high-efficiency transmission, and reliable distribution networks integration.

What Is Generate Electricity?

Generate electricity converts energy to electric power using generators, turbines, and inverters for grid supply.

✅ Electromechanical conversion with synchronous or induction generators

✅ Power electronics: rectifiers, inverters, MPPT, AC/DC conversion

✅ Sources: PV, wind, hydro, gas turbines; grid-tied or microgrid

There are several ways to generate electricity. There are "thermal" methods like coal, oil, natural gas, peat, biomass - in all these cases, the energy that is trapped in the form of carbon (found in the ground in the form of fossil fuels) is released by heating the carbon. The problem, as we all know too well, is that the breakdown of carbon through burning it is the by product of gases such as carbon dioxide, a main contributor to global warming. But that is not all. When we burn carbon, there are other pollutants that are released into the atmosphere like sulphur dioxide and nitrous oxide. These chemicals are the principal contributors to acid rain. For a broader overview of these processes, see how electricity generation works across different fuel types.

We also produce electricity by non-fossil fuel methods by using uranium in nuclear fission "reactors" to create enough heat to boil water, which in turn produces large quantities of high pressure steam. This steam turns a turbine which turns a generator that manufactuers electic power through the conversion of mechanical energy into electrical energy. This sequence illustrates how electricity is generated from thermal sources in practice.

There is more than one renewable source of energy to generate electricity, by using solar panels to convert sunlight and wind energy to convert kinetic energy into electric power. In any case dependable power generation, transmission and distribution is critical for providing heat, light and power for human activities. Electric power has been generated for the purpose of powering human technologies for at least 120 years from various sources of potential energy. The first power plants were run on wood, while today we rely mainly on oil, natural gas, coal, hydroelectric and nuclear power and a small amount from hydrogen, solar energy, tidal harnesses, wind generators, and geothermal sources. Many utilities are expanding portfolios with alternative electricity options to meet emissions targets.

Methods To Produce Electric Power

Understanding the landscape of sources of electricity helps frame the methods described below.

Rotating turbines attached to electrical generators produce most commercially available electricity. Turbines may be driven by using steam, water, wind or other fluids as an intermediate energy carrier. The most common usage is by steam in fossil fuel power plants or nuclear power plants, and by water in hydroelectric dams. Alternately, turbines can be driven directly by the combustion of natural gas or oil. Combined cycle gas turbine plants offer efficiencies of up to 60%. They generate power by burning natural gas in a gas turbine and use residual heat to generate additional electric power from steam. Wind turbines create power by using the wind. Solar updraft towers use wind that is artificially produced inside the chimney by heating it with sunlight. Solar parabolic troughs and solar power towers concentrate sunlight to heat a heat transfer fluid that is used to produce steam to turn a turbine. In all these configurations, the core electricity generator converts rotational energy into electrical output.

Within wind applications, the modern electricity windmill integrates power electronics and control systems to maximize capacity factor.

Small power generators are often powered by reciprocating engines burning diesel, biogas or natural gas. Diesel engines are often used to create power, usually at low voltages. Biogas is often combusted where it is produced, such as a landfill or wastewater treatment plant, with a reciprocating engine or a microturbine, which is a small gas turbine. These distributed assets play a growing role in overall electricity production for remote sites and microgrids.

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Wireless electricity transmits power without wires using electromagnetic fields, such as magnetic resonance or microwave transmission. It enables charging devices remotely, powering sensors, and improving efficiency in smart grids, EVs, and wireless charging systems.

What is Wireless Electricity?

Wireless electricity refers to the transmission of electrical energy without physical conductors like wires.

✅ Powers devices through electromagnetic fields, like inductive coupling

✅ Enables contactless charging in consumer electronics and EVs

✅ Supports smart grids, IoT, and remote sensors with flexible energy delivery

Wireless electricity, also known as wireless power transmission, was first conceptualized by Nikola Tesla, a pioneer in the field of alternating current (AC) electricity. Tesla’s groundbreaking experiments at Colorado Springs in 1899 showcased how power could be transmitted without wires using a magnetic field. He used a Tesla coil to transmit 100 million volts of high power over a distance of 26 miles, wirelessly powering 200 light bulbs and an electric motor. His vision was to develop a wireless system capable of transmitting power over long distances with minimal energy loss.

Tesla’s system relied on a high-frequency alternating current and magnetic resonance to transmit power wirelessly. His experiments with the Tesla coil laid the groundwork for modern wireless technologies, including short-range wi

reless power transmission systems, such as wireless charging pads and Wi-Fi routers. Wireless charging pads today utilize magnetic fields to transmit power to devices, a concept similar to Tesla’s idea of harnessing the Earth’s resonance to transmit power over longer distances. Tesla’s vision extended beyond short-range wireless systems—he dreamed of a global system where energy flows freely through the air without requiring a direct line of sight.

Tesla’s experiments also demonstrated the efficiency of wireless systems. The Tesla coil could transmit power wirelessly to fluorescent light bulbs even when they were several feet away from the coil. This concept of powering devices wirelessly has evolved over time, with companies like Wi-Charge developing systems to transmit power wirelessly to small devices. In Tesla’s time, he envisioned a world where any amount of power could be transmitted wirelessly across the globe. However, financial struggles eventually led to the abandonment of his wireless power transmission projects, including the unfinished Wardenclyffe tower on Long Island. Devices powered wirelessly still rely on efficient energy flow, making concepts such as electrical resistance and impedance crucial to design and performance.

Despite Tesla’s challenges, modern advancements have kept his vision alive. Short-range wireless power transmission systems, like those used in Wi-Fi routers and wireless charging pads, are now commonplace. These technologies utilize magnetic fields to transmit power wirelessly over short distances, offering a practical solution for wirelessly charging devices such as smartphones and laptops. Wi-Charge is exploring the potential of wirelessly charging devices without requiring close contact, enabling more flexible and efficient energy distribution. Tesla’s coil and modern systems like Wi-Charge operate based on resonant principles, closely related to inductance and capacitance.

Modern Innovations in Wireless Electricity

Recent breakthroughs have brought Tesla’s dream closer to reality:

• In 2024, DARPA successfully transmitted 800 watts of power over 5 miles using a laser beam—enough to make popcorn at the receiver site.

• KAIST in South Korea demonstrated the ability to charge 40 smartphones at once using magnetic resonance over a distance of 5 meters.

• Detroit’s Corktown district now hosts a functioning inductive charging roadway, allowing EVs to charge wirelessly while in motion.

These examples show that wireless electricity is no longer a distant vision but a rapidly advancing technology with real-world applications. Concepts such as watts, volts, and amperes remain fundamental even in advanced wireless systems.

Types of Wireless Power Transmission Technologies

Applications of Wireless Electricity

• Consumer Electronics: Wireless charging pads and smart home devices are now common.

• Electric Vehicles (EVs): Inductive charging roads and parking pads reduce dependency on cable stations.

• Medical Implants: Enables powering of implants and biosensors without invasive wiring.

• Remote Sensors: In agriculture, factories, and infrastructure, wireless power extends sensor life.

• Smart Grids: Flexible energy distribution for remote locations and emergency response.

Challenges and Future Outlook

Despite its promise, wireless electricity faces challenges:

• Efficiency drops over distance

• Alignment issues in inductive systems

• Line-of-sight limitations in laser and IR systems

• Safety regulations for high-power beaming

However, the future is promising. Emerging materials, such as metamaterials and metasurfaces, are enhancing transmission efficiency. AI-enhanced beam control, dynamic alignment systems, and frequency-agnostic receivers are under development.

From Tesla's early experiments to DARPA's record-setting laser transmission, wireless electricity is evolving into a transformative force. As the technology matures, its applications will expand, powering a world that may one day be truly wire-free.

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Faraday’s Law describes electromagnetic induction, where changing magnetic fields generate electricity. Discovered in 1831 by Michael Faraday, it revealed how magnetism produces electric current and became the foundation of modern electrical science.

What is Faraday’s Law?

Faraday's Law is a fundamental principle of electromagnetism describing how a changing magnetic field induces an electromotive force (emf) in a conductor. The law: 

✅ Explains electromagnetic induction and induced current

✅ Is essential for transformers, generators, and electric motors

✅ Is the foundation of modern physics and electrical engineering

For a deeper look at the mathematics, mechanisms, and engineering uses, see our detailed guide on Faraday’s Law of Induction."

Michael Faraday, the Inventor of Faraday’s Law

In 1831, Michael Faraday performed experiments with coils of wire, magnets, and galvanometers. He observed that when a magnet was moved through a coil, or when the magnetic field around the coil was changed, a current was generated.

Faraday’s Law proved that electricity could be produced directly from magnetism — a revolutionary concept at the time. Faraday’s experiments were deceptively simple but profoundly important, showing that energy could be converted from one form (mechanical motion of the magnet) into another (electric current). 

Theoretical Context

Faraday’s Law provided one of the first clear demonstrations that electricity and magnetism are not separate forces but part of the same phenomenon. This insight was later formalized by James Clerk Maxwell, whose Maxwell’s equations mathematically unified electromagnetism.

Alongside Ampère’s Law and the Biot–Savart Law, Faraday’s Law gave scientists a new framework to describe the invisible forces of nature. It also introduced the idea of fields, regions of influence surrounding magnets and electrical charges, which became central to modern physics. Read our article titled: Who Invented Electricity for more information about the foundation of electricity.

Understanding Electromagnetic Induction

Faraday’s Law showed that induction can occur in several ways:

• By moving a conductor through a magnetic field

• By changing the strength of a magnetic field

• By altering the orientation or size of the conductor’s loop in the field

In each case, the result is the same: a changing magnetic flux produces an EMF. The direction of the induced current is explained by Lenz’s Law, which states that the induced current always opposes the change that created it, ensuring energy conservation.

The principle of electromagnetic induction is the basis for the operation of various electrical devices, including:

• Generators: These devices convert mechanical energy into electrical energy by rotating a coil within a magnetic field, causing the magnetic flux to change and inducing an EMF in the coil.

• Transformers: Transformers work on the principle of mutual induction, where a changing current in the primary coil produces a varying magnetic field, which in turn induces an EMF in the secondary coil.

• Induction motors: In these motors, a changing magnetic field is created by the stator, inducing an EMF in the rotor conductors, which generates a current that interacts with the magnetic field to produce torque and drive the motor.

Coils, Flux, and Electrodynamics

Faraday’s induction experiments showed that the induced voltage in a coil is equal to the rate of change of magnetic flux through it. This relationship depends on several factors, including the magnetic field strength, the loop area, and the number of turns in the coil. In fact, the induced EMF is proportional to the rate at which a coil of wire cuts across magnetic field lines, meaning that more turns in the coil increase the overall flux linkage.

From the perspective of electrodynamics, this effect illustrates how charges respond to forces within a conductor. The Lorentz force explains why electrons move when exposed to a changing field, while a time-varying field generates a non-conservative electric field that sustains induction. These principles are embedded in the Maxwell–Faraday equation, which extends Faraday’s insight into the framework of Maxwell’s equations.

Faraday also noted that induction is not limited to mutual coupling between separate coils. The principle of self-induction arises when a coil’s own changing current produces an induced EMF opposing the original change. This phenomenon became central to the design of inductors and transformers.

Ultimately, the legacy of Faraday’s Law extends to our understanding of electromagnetic waves. By linking induction with Maxwell’s field theory, Faraday’s Law explains how time-varying fields generate waves that propagate through space — a concept that underpins modern communications and physics.

Why Faraday’s Law Mattered

At the time of its discovery, electricity was known mainly from batteries and static experiments. Faraday’s Law proved that electricity could be generated in continuous and controlled ways. This breakthrough opened the door to inventions that would transform society, from power generation to communication technologies.

Everyday Applications of Faraday’s Law

The importance of Faraday’s Law extends far beyond the laboratory. It forms the basis of countless technologies, including:

• Electric generators – converting mechanical energy into electrical power.

• Transformers – enabling efficient power transmission over long distances.

• Induction motors – powering everything from industrial machines to household appliances.

• Wireless charging systems – transferring energy without physical connections.

• Magnetic storage and security – used in swipe cards and sensors.

• Induction heating and cooktops – converting magnetic energy into heat for practical use.

• Eddy current braking – providing non-contact braking in trains, amusement rides, and industrial systems by inducing currents that resist motion.

• Inductors in circuits – storing energy in magnetic fields and controlling current in electrical systems.

• Wireless energy transfer in EVs – enabling electric vehicles to charge without plugs using electromagnetic induction.

These applications show how Faraday’s 19th-century experiments continue to power the 21st-century world.

Faraday’s Legacy

Faraday’s Law was not just a scientific milestone but also a turning point for technology and industry. Without his insights, there would be no electric power grids, no telecommunications as we know them, and no modern electronics.

The law also highlighted an important principle: that simple experiments can lead to world-changing insights. With little formal education, Faraday reshaped science and technology, showing that careful observation and curiosity could unlock nature’s secrets.

Faraday’s Law remains one of the most important discoveries in physics. By revealing that changing magnetic fields could create electricity, it provided the foundation for modern electrical engineering, industrial power systems, and everyday devices.

Faraday’s Law stands as a reminder that the forces of nature — magnetism, electricity, and motion — are deeply interconnected. Faraday’s insight into electromagnetic induction continues to shape the modern world, demonstrating that a discovery made nearly two centuries ago remains a vital force in our lives today.

Frequently Asked Questions

What did Faraday’s Law prove?

Faraday’s experiments with coils and magnets in 1831 proved that a changing magnetic field can induce an electromotive force (EMF) in a conductor. This showed that electricity can be generated from magnetism, a discovery that revolutionized science and technology.

Why is Faraday’s Law important today?

Faraday’s Law is the foundation of electrical power generation and transmission. It explains how generators, transformers, and induction motors work, making it essential to modern energy systems, communication technologies, and countless everyday devices.

How does Faraday’s Law relate to Maxwell’s equations?

Faraday’s Law was later formalized in Maxwell’s equations as the Maxwell–Faraday equation, which shows that a changing magnetic field produces an electric field. This unification confirmed that electricity and magnetism are two aspects of the same force.

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Electricity deregulation enables competitive energy markets, retail choice, and wholesale power pricing, separating generation from transmission and distribution to enhance grid reliability, lower tariffs, spur innovation, and diversify suppliers for industrial and commercial loads.

What Is Electricity Deregulation?

Electricity deregulation unbundles utilities, enabling market-based generation, retail choice, and efficient pricing.

✅ Unbundles generation, transmission, and distribution functions.

✅ Enables locational marginal pricing and demand response programs.

✅ Promotes independent system operators and competitive wholesale markets.

In The United States, Electricity Deregulation is now more than 15 years into an experiment to deregulate and restructure the electric power generation, transmission and distribution industry. Some claim that it has produced national benefits as much as $30 billion per year. Others claim the change has resulted in penalties as high as $30 billion per year. And still others point to major declines in reliability and increased frequency of blackouts. For context, resources like what electricity is can clarify foundational terms before policy comparisons.

Why are there such broad disagreement about the impact? How do the results of deregulation and restructuring compare with predictions? Has the change benefited our industrial or commercial users, ordinary consumers and our national economy? To determine the answers to these questions, the key changes that were implemented must be reviewed. A primer on electric power systems helps frame how generation, transmission, and distribution interact under different market rules.

The nature of electric power systems requires significant investments in major facilities, typically costing from tens of millions to billions of dollars. These facilities have long construction lead-times, taking years from start to completion, and often remain in service for as long as 40 years. Regulation provided for the return of the investment (depreciation) and the return on the investment (earnings) over the facilities lifetime. These cost-recovery structures ultimately filter into electricity prices that customers see on their bills.

The systems were interconnected to take advantage of the diversity in times of peak use and in times of equipment failures and emergencies. The industry focus was on long-term cost minimization. Decisions were based on life-cycle cost analyses. In such an environment, a high degree of cooperation developed among those involved in owning, managing, planning and operating electric power systems2. The national savings from this cooperation and interconnection were carefully studied many times and had increased to nearly $20 billion annually3 by the late 1980s. Prices to consumers, controlled by state regulators, were reduced by these savings. Such regional coordination also stabilizes electricity supply during peak seasons and emergencies.

Many supporters of this and the introduction of competition into the electric power business believed it would lead to significant economic benefits and price reductions to consumers. The move to have competition replace government regulation gained many adherents, particularly in large industry, where there were concerns over growing foreign competition; with economists in the nation's universities, who welcomed an opportunity to apply their theories; by investment bankers, who saw the huge fees they would earn to finance numerous buyouts and mergers; by lawyers, accounting organizations and some engineers, who saw increased business; and by entrepreneurs, who saw opportunities for huge profits. Some utility executives believed competition would help increase the return to investors that had, at times, been unfairly limited by regulators. Advocates often cited gains in electricity power market efficiency as proof that liberalization could unlock innovation.

In general, those favouring Electricity Deregulation and competition as a driver were not aware of its effect on the benefits of coordination. Most lacked knowledge of power systems functioning and costs. The concept that profits would increase for the suppliers while prices would go down for consumers obviously required major cost reductions. But no analyses of the source of these cost reductions were conducted by competent engineers. Rather, it was the common belief they would result from increased competition. They sometimes conflated consumer-level tactics like how to save electricity with systemic cost drivers in bulk power operations.

Have such cost reductions occurred? The answer is clearly no. There have been some improvements in generator unit availability and efficiency. On the other hand, there have been huge additional costs and cost increases stemming from the reduced benefits of coordination, the increased complexity of the system, scheduling, and other operating procedures. For end users, focusing on saving electricity can mitigate bill impacts even as market-level costs fluctuate.

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