If electrical providers share the same power lines, how do they know who is consuming whose power?


My assumption is that electrical providers own their generators. So when they generate electricity, it goes out into this massive repository that is the electrical grid and then all consumers take at will from it.

So how do electrical providers keep track of “their” electricity and who is consuming it? Electrical production has to meet demand in real time so how do providers know who is responsible for generating how much at any given moment?

And how do the companies that own the power lines factor into this? Are they at all related to the power generation companies or are the latter just customers?

In: Engineering

Each individual house has an electric meter that measures how much electrical energy is going into just that one house.

And then some guy from the electric company comes to each house once a month to read the meters and note how much energy each house is using.

Or more often nowadays a “smart meter” can send that data to the electric company remotely.

The lines hold a consistent electrical current which feeds into a companies meter on your house. That they track and charge you money for.

Electricity is “fungible” which means that any given unit of it is indistinguishable from any other. This means that it doesn’t matter. If you take out 15kW from the power grid then your electric provider has, somewhere, put 15kW in.

Consumers consume and the power distribution company logs that

Producers produce and the power distribution company logs that

There are going to be a couple fast response plants that are tasked with keeping the grid stable but if you’ve selected a green energy producer then they just produce what they can when they can.

At the end of the month the power distribution company checks the numbers and says “Your customers bought 1.2 MWh of power, you only generated 1.1 MWh, you need to pay another generating company for 0.1 MWh of power”

Its too clunky to attempt in real time especially since you can’t really control how much power you get from your solar panels and wind turbines, so its settled either monthly or quarterly and the production companies have to buy/sell generation credits to make it line up, but since you generally pay a bit more to the green provider, they can buy from the guy running on oil and still make a bit of a profit.

You can be certain that any one energy network is only being fed electricity by one company. That company either sells energy direct to consumer or sells rights (often do both) to energy retailers who then take on the responsibility of checking your meter and managing minor works directly related to their customers (such as new connections and disconnections). They then get to charge you their rate for your usuage and they pay a wholesale rate to the Energy Network owner. The network owner is still responsible for the upkeep of the infrastructure

Smart meters are making it a lot easier for energy retailers to do this as they need less boots on the ground to track usuage as they connect to the internet and send the information straight to your “provider”. Some companies will occasionally offer a free upgrade to a smart meter as a sign on bonus when you switch from another provider.

Most ‘providers’ are resellers and not producers. Electricity is produced and is basically always available, your provider buys a certain amount at a certain price and sells it to you based on how much you use (according to your meter).

If anyone knows what happens of a provider doesn’t buy enough to cover their customers useage I’d love to know, because that has to be possible…

In basic terms, producers guess how much they can generate and how much it will cost to generate, then decide how much they produce and for what price. They are business entities, profit is the key.

Market operator guesses how much hourly energy will be needed tomorrow and asks producers about their prices and amount and then sets prices for every hour for tomorrow. Producers are responsible providing that energy. They can produce that or buy from other producers, at the end of the day all that matters if energy provided to line.

Tomorrow comes and everything just works. This is all good but what happens if there is a concert and more energy needed, or your office building is closed and now we have more energy than needed. Every power switch including the one in your houses effect the power need and it needs to be balanced, realtime.

Good thing is market operator also monitors usage and tell some producers to increase or decrease production. They do because they are also paid for that too. Yes sometime they are paid not to produce, because all that matters if the balance.

I am software developer working in a company that develops solutions for energy sector and this is how electric grid works in my humble knowledge on the subject. If I misrepresented something please feel free to correct me.

In ERCOT (Texas) everything was “unbundled” when the industry was de-regulated (or re-regulated depending on your viewpoint). So generation is independent of transmission and distribution. Energy Service Providers (ESP’s) sell energy to the end consumer buy buying energy from the generators through a QSE (Qualified Scheduling Entity) and delivering to the end user on transmission and distribution lines, which may or may not be one company. The distribution company (the “Wires” company) is the one that delivers your power to point of use. This is the one you have no choice over, since each has it’s own territory.

Energy at every point (generation, transmission, distribution) is metered by extremely accurate meters that have to meet exacting standards. These are the “settlement” meters. There are also the meters on your home.

The “settlement” meters are all time stamped at a minimum of every 15 minutes, although I believe generation is actually at 5 minute intervals. All this metering data is routed through ERCOT where generation output is matched against all the various transmission/distribution metering points, and ultimately balanced out against the end metering at your house. This is the only way it can be done, since the grid is entirely interconnected (internally), so generation is about like pumping a water well into a river, then monitoring who pulls water out.

Once all the data has been processed, fund allocations are made based on who bought what from whom at what price and what time. Even though the metering has 15 minutes intervals, the billing is usually done on an hourly basis.

Anyone can play. Grid generation is determined by who can offer “base” load at the cheapest price. This is the load that is pretty much there all the time. The “intermediate” load (i.e., the day gets warmer and load goes up from base) is the generation that is slightly more expensive. The highest cost generation comes on at peak (late afternoon in a Texas summer). The ESP’s (remember them) try to study their load patterns, weather predictions, etc. and arrange through the QSE’s to acquire given amounts of power at given times. Since “anyone can play” this means that the end user (you) can use a solar or wind turbine to generate back into the grid through your house meter and receive compensation.

ESP’s are responsible for their costs. If they don’t schedule enough energy, they end up paying a premium price at peak loads (aka, the recent ice storm). On the flip side, if they schedule too much and don’t need it, they can either try to sell it on the market, or pay for it even though they didn’t need it.

The “wires” companies get their money by fixed rates based on their “cost of service” and often tie in an extra charge based on kwh usage. They do not market “energy” unless they are an Electric Cooperative (which I think is unique to ERCOT). So the “wires” companys roll is to provide the actual service and metering.

There are more “fun and games” money making schemes like Congestion Revenue Rights if you want to look up an example of capitalism at it’s finest (or worst).