What is a power grid and how does it work?

Direct Energy, December 20, 2023

4 minute read

What is a power grid and how does it work?

Direct Energy, December 20, 2023

4 minute read

You've likely heard of "the grid" in news reports or from friends or family, but what is “the grid,” and how does it work?

Firstly, “the grid” is short for “the power grid.” It may seem like a complicated topic, but we'll give you the basics of the power grid in straightforward terms. Read on to discover what the power grid is and how it works.

photo of a power grid with sun shining
photo of a power grid with sun shining
photo of a power grid with sun shining

What is the power grid?

The power grid, a.k.a. the electric grid, is a system designed to generate and deliver electrical power to consumers. It does this through a network of interconnected power stations, substations, power lines and even smaller local grids.

Power grids can vary in size, with some local grids only providing power to that region. Larger, mega or super grids generate and transmit power to entire countries or continents. Think of how food crops are grown and harvested, processed and cleaned for consumption, and finally distributed to stores where you can purchase them. Power grids work the same way, only on a much larger scale.

What we refer to as the grid is a network in general. Each network component serves a specific purpose: to supply power where and when needed.

How the power grid works

A power grid's ultimate function is to deliver energy to consumers. The United States' electrical grid does this through a process where electrical power is generated, transmitted, and distributed.

  • Generation is when a power station receives a demand for electrical power and generates electricity through one of many processes.
  • Transmission is the process of transporting electricity across large distances while also converting its voltage to match the destination requirements.
  • Distribution is the process of delivering electricity to homes and businesses via powerlines to power your home and electronic devices.

How stations generate electricity

Power stations, sometimes called power plants, are primarily responsible for generating electricity for power grids. While they all produce energy, power stations take different forms.

The most common way to produce electricity is using electric turbines. Rapidly spinning an electric turbine creates a charge that can be harnessed and transmitted to substations on their way to your home or business.

What differentiates most power stations is the method used to spin the electric turbine. Hydroelectric power stations use the water flow to push blades that, in turn, rotate the turbine. Most plants, use steam to turn the turbines. Fossil fuel plants burn coal or other fuel to produce steam that turns the blades, and nuclear stations use fuel rods to do so.

What are power substations?

After power gets generated in power stations, it must be distributed to substations before it can get to your home.

Sometimes called the "bulk power system," substations are responsible for reducing and increasing the voltage of generated electrical power so it can be transmitted and used. Substations accomplish this through transformers that receive electricity from power stations and convert its voltage.

Electricity must be at a high enough voltage to overcome the resistance in power lines and want to flow to its final destination. So, transformers step up the voltage to ensure that travel is possible.

High voltage is excellent for transmitting power, but it's not great for use by the final consumer, you. Voltage is the electricity's "want" to travel, meaning a high voltage charge will even flow through non-conductive materials. This can be dangerous when the closest outlet is you, hence the high voltage warning signs you may have seen. Instead, electricity again passes through a transformer where the voltage is stepped down to ensure it fits the safety requirements for when it reaches your outlets.

Are power lines part of the grid?

Power lines are essential in both the transmission and distribution of energy. The power grid itself is a network of interconnected stations, and its power lines, or conductors, make those connections possible.

Because power lines carry high-voltage electricity that wants to travel, engineers ensure cables are far apart to create a buffer to prevent arcing. Additionally, shield wires run along some power lines. These cables don't transmit any electricity and instead protect the live wires from lightning strikes.

Finally, the electricity generated in power stations and transmitted to substations is distributed by power lines to your home or business, ready to power your air conditioner, computer and whatever other devices you choose to plug into an outlet!

How peak demand affects the grid

Peak demand refers to a specified time when consumers in an area all require the largest amount of electricity. Usually, these periods are measured hourly, with the actual peak usually lasting a single hour.

Knowing when peak demand is for your region is essential to keeping the power grid running. If the peak demand exceeds the amount of electrical power a grid can provide, it can lead to power outages or even blackouts.

That's why it's important to be mindful of peak demand hours and what you can do to reduce your electricity use during those times.


Explore the learning center

Explore our other categories by selecting one from the dropdown menu. 

1982472_DE Category Page Large Promos_FinalImagesforDev

Amazon Prime on us

Want to enjoy all the shopping, streaming and savings you want with Amazon Prime, just for paying your electricity bill? Get an Amazon Prime membership on us with select plans! 

Signing up for Direct Energy is easy!

We offer a wide range of plans and even help you customize them to fit your needs! Shop our plans to find your best fit today.  

Need help placing an order?
Texas customers: call us at 1-855-461-1926
Northeast and Midwest customers: Contact us


Questions about your current service?
Texas customers: call us at 1-888-305-3828
Northeast and Midwest customers: Contact us