Electric Power Basics
Electricity can be generated in many ways. The most common is to burn fuel (often coal) to convert water into steam that is used to spin a steam turbine, connected to a generator to make electricity. Natural gas has been increasingly used in recent years to fuel gas turbines (like used on jet aircraft), connected to a generator to make electricity. Generators can also be turned by water — as in the major hydroelectric power plants in many parts of the country — or by wind turbines, as is increasingly the case. The electricity then flows along the wires that make up the power transmission and distribution system to where it is needed in urban and rural areas to provide light, heat, or mechanical energy.
Over the past 100 years, the electric power system has grown up around the "central station" model, in which the transmission system distributed the power from large centralized power plants — often located near the source of fuel (or water) — to urban and rural loads often located hundreds of miles from the power stations. Historically, the economies of scale of large power plants have contributed to this approach, as larger power plants were able to achieve higher conversion efficiencies.
Today, the evolution of technology, and the economies of production, are shifting the trend to more "distributed" power, in which small generation facilities are located near the loads, mitigating the need for transmission and avoiding the costs and losses incurred through electric power transport. The increased sensitivity of loads to the "quality of power" has also contributed to this trend. Distributed power systems are commonly used for backup power in applications such as hospitals, financial institutions, manufacturing facilities, computer installations, or any other location that cannot afford to lose power.
Of course, most of the electric power used in the United States continues to be delivered to where it is needed via the electrical grid, which still receives most of its power from large power plants powered by coal, nuclear energy, natural gas, or hydropower.