Electricity retailing is the final process in the delivery of electricity Electricity is a general term that encompasses a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning and static electricity, but in addition, less familiar concepts, such as the electromagnetic field and electromagnetic induction from generation The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday. His basic method is still used today: electricity is generated by the movement of a loop of wire, or disc of copper between the poles of a magnet to the consumer. The other main processes are transmission Electric power transmission is the bulk transfer of electrical energy, a process in the delivery of electricity to consumers. A power transmission network typically connects power plants to multiple substations near a populated area. The wiring from substations to customers is referred to as electricity distribution, following the historic and distribution The modern distribution system begins as the primary circuit leaves the sub-station and ends as the secondary service enters the customer's meter socket. A variety of methods, materials, and equipment are used among the various utility companies, but the end result is similar. First, the energy leaves the sub-station in a primary circuit, usually.
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Beginnings
Electricity retailing Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" began at the end of the 19th century when the bodies which generated electricity for their own use made supply available to third parties. In the beginning, electricity was primarily used for street lighting Lighting or illumination is the deliberate application of light to achieve some aesthetic or practical effect. Lighting includes use of both artificial light sources such as lamps and natural illumination of interiors from daylight. Daylighting is often used as the main source of light during daytime in buildings given its low cost. Artificial and trams A tram, tramcar, trolley, trolleycar, or streetcar is a railborne vehicle, of lighter weight and construction than a conventional train, designed for the transport of passengers within, close to, or between villages, towns and/or cities, on tracks running primarily on streets. Certain types of cable car are also known as trams. The public could buy once large scale electric companies had been started.
The provision of these services was generally the responsibility of electric companies or municipal authorities who either set up their own departments or contracted the services from private entrepreneurs. Residential, commercial and industrial use of electricity was confined, initially, to lighting but this changed dramatically with the development of electric motors An electric motor is a motor that uses electrical energy to produce mechanical energy, usually through the interaction of magnetic fields and current-carrying conductors. The reverse process, producing electrical energy from mechanical energy, is accomplished by a generator or dynamo. Traction motors used on vehicles often perform both tasks, heaters An electric heater is an electrical appliance that converts electrical energy into heat. The heating element inside every electric heater is simply an electrical resistor, and works on the principle of Joule heating: an electric current through a resistor converts electrical energy into heat energy and communication Communication is a process of transferring information from one entity to another. Communication processes are sign-mediated interactions between at least two agents which share a repertoire of signs and semiotic rules. Communication is commonly defined as "the imparting or interchange of thoughts, opinions, or information by speech, writing, devices.
The basic principle of supply has not changed much over time. The amount of energy used by the domestic consumer, and thus the amount charged for, is measured through an electricity meter An electric meter or energy meter is a device that measures the amount of electrical energy supplied to or produced by a residence, business or machine that is usually placed near the input of a home to provide easy access to the meter reader.
Customers are usually charged a monthly service fee and additional charges based on the electrical energy (in kWh The kilowatt hour, or kilowatt-hour, is a unit of energy equal to 3,600,000 joules) consumed by the household or business during the month. Commercial and industrial consumers normally have more complex pricing schemes. These require meters that measure the energy usage in time intervals (such as a half hour) to impose charges based on both the amount of energy consumed and the maximum rate of consumption, i.e. the maximum demand, which is measured in kVA.
Monopoly supply
The rapid growth in electric appliance usage in the early part of the 20th century contributed to an explosive growth in electrification Electricity is a general term that encompasses a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning and static electricity, but in addition, less familiar concepts, such as the electromagnetic field and electromagnetic induction around the world.
The supply of electricity to homes, offices, shops, factories, farms, and mines became the responsibility of public utilities A public utility is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies. Common arguments in favor of regulation include, which were either private organizations subject to monopoly In economics, a monopoly (from Greek monos / μονος + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.[clarification needed] Monopolies are thus characterized by regulation Regulation is "controlling human or societal behaviour by rules or restrictions." Regulation can take many forms: legal restrictions promulgated by a government authority, self-regulation by an industry such as through a trade association, social regulation , co-regulation and market regulation. One can consider regulation as actions of or public authorities owned by local, state or national bodies.
In some countries a statutory or government-granted monopoly In economics, a government-granted monopoly is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement. As a form of coercive was created, which was controlled by legislation (for example Eskom Eskom is a South African electricity public utility, established in 1923 as the Electricity Supply Commission by the government of South Africa in terms of the Electricity Act (1922). It was also known by its Afrikaans name Elektrisiteitsvoorsieningskommissie (EVKOM). The two acronyms were combined in 1986 and the company is now known as Eskom in South Africa The Republic of South Africa is a country located at the southern tip of Africa, with a 2,798 kilometres coastline on the Atlantic and Indian Oceans. To the north lie Namibia, Botswana and Zimbabwe; to the east are Mozambique and Swaziland; while Lesotho is an independent country wholly surrounded by South African territory).
Home electrical metersElectricity retailing in the period from approximately 1890 to 1990 consisted of managing the connection, disconnection and billing of electricity consumers by the local monopoly supplier.
In many utilities there was a marketing Marketing is the process associated with promoting for sale goods or services. It is considered a "social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others." It is an integrated process through which companies create value for customers function which encouraged electricity usage when there was excess capacity to supply and encouraged conservation when supply was tight.
Creating a market
In 1990 there was a significant development in the way electricity was bought and sold. In many countries, the electricity market In economic terms, electricity is a commodity capable of being bought and sold. An electricity market is a system for effecting the purchase and sale of electricity, using supply and demand to set the price. Wholesale transactions in electricity are typically cleared and settled by the grid operator or a special-purpose independent entity charged was deregulated Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces. Deregulation does not mean elimination of laws against fraud, but eliminating or reducing government control of how business is done, thereby moving toward a more free market to open up the supply of electricity to competition. In the United Kingdom The United Kingdom of Great Britain and Northern Ireland is a sovereign state located off the northwestern coast of continental Europe. It is an island country, spanning an archipelago including Great Britain, the northeastern part of Ireland, and many small islands. Northern Ireland is the only part of the UK with a land border, sharing it with the Electricity Supply Industry was radically reformed to establish competition, including a market in advising users about switching supplier Energy switching services are a kind of company that has come to exist since the EU began deregulating the gas and electricity markets, to open them to international competition, in 1996. Progress has been uneven across member countries, but in the UK there is now open competition among suppliers. Pricing structures and special offers are often. This trend continued in other countries (see New Zealand Electricity Market The New Zealand electricity market is the market for wholesale trading of electricity in New Zealand. It is administered by the Electricity Commission. Market participants include state-owned enterprises, trust owned companies and public companies and deregulation Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces. Deregulation does not mean elimination of laws against fraud, but eliminating or reducing government control of how business is done, thereby moving toward a more free market) and the role of electricity retailing changed from what was essentially an administrative function within an integrated utility to become a risk management function within a competitive electricity market In economic terms, electricity is a commodity capable of being bought and sold. An electricity market is a system for effecting the purchase and sale of electricity, using supply and demand to set the price. Wholesale transactions in electricity are typically cleared and settled by the grid operator or a special-purpose independent entity charged.
Electricity retailers now provide fixed prices for electricity to their customers and manage the risk involved in purchasing electricity from spot markets or electricity pools. This development has not been without casualties. The most notable example of poor risk management (coupled with poor market regulation) was the 2001 California electricity crisis The California electricity crisis of 2000 and 2001 was a situation where California had a shortage of electricity, when Pacific Gas and Electric The Pacific Gas and Electric Company , (NYSE: PCG) is the utility that provides natural gas and electricity to most of the northern two-thirds of California, from the Oregon border to Bakersfield. It is a subsidiary of the PG&E Corporation. The southern part of the state is generally served by Southern California Edison for power and natural and Southern California Edison Southern California Edison , the largest subsidiary of Edison International (NYSE: EIX), is the primary electricity supply company for much of Southern California. It provides 11 million people with electricity. However, the Los Angeles Department of Water and Power, San Diego Gas & Electric, Imperial Irrigation District and some smaller were driven into bankruptcy by having to purchase electricity at high spot prices and sell at low fixed rates.
Customers may choose from a number of competing suppliers. They may also opt to pay more for "green" power Sustainable energy is the provision of energy such that it meets the needs of the present without compromising the ability of future generations to meet their needs. A broader interpretation may allow inclusion of fossil fuels and nuclear fission as transitional sources while technology develops, as long as new sources are developed for future, i.e. electricity sourced from renewable energy Renewable energy is energy generated from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . In 2006, about 18% of global final energy consumption came from renewables, with 13% coming from traditional biomass, such as wood-burning and 3% from hydroelectricity. New renewables (small hydro, modern generation such as wind power Wind power is the conversion of wind energy into a useful form of energy, such as electricity, using wind turbines. At the end of 2008, worldwide nameplate capacity of wind-powered generators was 121.2 gigawatts . In 2008, wind power produced about 1.5% of worldwide electricity usage; and is growing rapidly, having doubled in the three years or solar power Solar power is the generation of electricity from sunlight. This can be direct as with photovoltaics , or indirect as with concentrating solar power (CSP), where the sun's energy is focused to boil water which is then used to provide power. The solar power gained from photovoltaics can be used to eliminate the need for purchased electricity (.
An electricity provider is often known as "the electric company" or "the power company".
References
See also
- Distributed generation Distributed generation, also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or distributed energy, generates electricity from many small energy sources
- Eugene Green Energy Standard The Eugene Green Energy Standard is an international standard to which national or international green electricity labelling schemes can be accredited to confirm that they provide genuine environmental benefits. It is designed to encourage the generation and use of additional renewable energy sources for electricity generation, although the
- Net metering Net metering is an electricity policy for consumers who own renewable energy facilities, such as wind, solar power or home fuel cells. "Net", in this context, is used in the sense of meaning "what remains after deductions" — in this case, the deduction of any energy outflows from metered energy inflows. Under net metering, a
- Microgeneration
- Peak demand Peak demand is used to refer to a historically high point in the sales record of a particular product. In terms of energy use, peak demand describes a period of strong consumer demand and off-peak
- Vehicle-to-grid Vehicle-to-grid describes a system in which power can be sold to the electrical power grid by an electric-drive motor of a hybrid vehicle that is connected to the grid when it is not in use for transportation. Alternatively, when the car batteries need to be fully charged, the flow can be reversed and electricity can be drawn from the electrical
Categories: Electric power Categories: Energy development | Electrical engineering | Electricity | Power | Electricity distribution Categories: Electric power infrastructure | Networks | Electricity markets | Environmental taxation
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