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The grid

The electricity grid is a network of wires that connect electricity generators and consumers. The GB grid is formed of two networks: the high voltage transmission network, that connects large power stations to substations with the lower voltage distribution network, that connects to consumers and also integrates smaller power generators. The GB grid is owned by a series of transmission and distribution network operators, all monopolies of specific areas, and covers England, Scotland and Wales. There are electricity interconnectors to the island of Ireland, and to mainland Europe, allowing electricity to be traded on a continental scale grid.

Energy trading

Electricity is traded from years in advance to an hour in advance of when it is consumed. Energy suppliers, such as the ‘Big Six’, purchase electricity from generators and sell to consumers. There are also third-party traders buying and selling electricity. Bills for consumers include the overall wholesale costs of electricity as well as the costs of using the grid (known as network costs), policy costs (such as energy subsidies), operational costs and supplier profits.

Balancing the grid

Electricity supply and demand must be balanced to ensure they match at all times. If there is a deficit of electricity, there may be power cuts; if there is a surplus of electricity, the frequency on the grid may rise and appliances consuming electricity can be damaged. National Grid is the transmission system operator, ensuring the transmission grid remains balanced at all times. Energy suppliers undertake extensive forecasting to purchase sufficient power to cover their predicted supply. In addition to this forecasting, there are a series of mechanisms which National Grid can utilise to ensure the grid remains balanced. As more small generators, such as renewables, connect to the distribution grid, there is an increasing role for distribution system operators to balance the distribution grid.

The future of the grid

Historically power was supplied by a small number of large power stations, such as coal or nuclear. Increasingly, there are a greater number of generators, including smaller scale and domestic generation, and a greater diversity of generation technology, such as renewables, that are introducing more variability in supply. The need to balance both varying demand, and now more varying supply, is an ongoing challenge for system operators. Increasingly, the grid is transforming to be more flexible, capitalising on smart appliances, and integrating new technologies such as electric vehicles and battery storage.

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