How do you purchase and receive energy from a supplier on a particular grid without interfering with other suppliers?

Question

I know that I could choose to buy electricity from a specific provider. If I wanted clean renewable power I could choose a power company that operates hydro plants and they’d take my money every month.

But there are other users on the grid and power plants from different companies feed the grid as well so everyone actually draws power from power plants that aren’t operated by their suppliers, except their respective suppliers get paid for the energy used. This wouldn’t be a big deal if a power company could supply all of its customers. If my hydroelectric supplier has a capacity of 10000 MW and the company’s customers suddenly turned on all their devices, leading to a demand that would exceed capacity, some of the demand would be drawn from other suppliers due to the fact that they’re on the same grid. I don’t understand how other suppliers prevent this. How do they make sure Company A’s customers do not take more power from the grid than Company A can provide so Company B doesn’t inadvertently supply Company A’s customers without getting paid?

In: Economics

Answer 1

Looks like others have answered your main question but here –

> If my hydroelectric supplier has a capacity of 10000 MW and the company’s customers suddenly turned on all their devices, leading to a demand that would exceed capacity, some of the demand would be drawn from other suppliers due to the fact that they’re on the same grid. I don’t understand how other suppliers prevent this.

So others have established that each supplier should have enough generation to match load. Part of that requirement takes into account your peak load. That is the highest load requirement on record for your service area. Additionally, suppliers will have reserve overhead.

In addition to your own reserves – there exists a Reliability Coordinator whose sole job is to make sure that every supplier is meeting their load requirements from a bulk electric grid perspective. They run a marketplace for suppliers to purchase energy in real time (updated every 5 minutes) should they require more.

In some cases, it’s actually cheaper for these suppliers to purchase other people’s energy than generate their own. All sorts of things factor into that but it’s not uncommon for your local load profile to purchase energy in unique combinations from day to day.