Explainer: what is the grid?

We hear about it on TV and on the radio. Politicians talk about it all the time. And the vast majority of Australians rely on the grid to deliver the electricity that powers our homes, offices and businesses.

But what exactly is this “grid” we keep hearing about? What does it look like now, and what might it look like in the future?

What is the grid?

In broad terms, “the grid” refers to our electricity infrastructure. That includes the generators that produce power, along with the various poles, wires, and transformers that electricity flows through as it makes its way to the end user.

“The grid is probably the world’s most complex machine,” says Anthony Vassallo, a retired professor of sustainable energy development previously at the University of Sydney. “It’s got so many interconnected parts.”

(Technically, some electrical engineering experts use the term “grid” to specifically refer to only the system for electricity transmission and distribution – mainly the poles and wires – but we’re going to use the wider definition here.)

It starts with electricity generation. Historically, this would happen in large coal- or gas-fired power stations. Nowadays, the electricity mix is much more diverse, incorporating rooftop solar panels and larger wind and solar ‘farms’.

“Over the last five years or so, some of these solar and wind systems have become as big as some of the smaller coal-fired power stations were in the past,” Vassallo says.

Once electricity is generated, it’s fed into wires that carry high-voltage electricity to bulk supply substations. At the substation, transformers reduce the voltage and the electricity is transmitted to distribution substations, where the voltage is stepped down again. From there, the electricity travels along wires to smaller-scale transformers, which reduce the voltage again before the electricity reaches homes and businesses. Big users like industrial smelters or large businesses tap into the grid at a higher voltage than households do.

“Power flows around the system like water through a whole lot of pipes and dams,” explains Vassallo.

The electricity supply for most states in Australia is linked in one massive grid connecting Queensland, New South Wales, Victoria, South Australia and Tasmania, forming the National Electricity Market or NEM. The NEM comprises around 40,000 km of transmission lines and cables and supplies over 10 million customers. Western Australia and the Northern Territory each have their own separate electricity infrastructure.

What is the grid concept electricity grid map showing the transmission infrastructure across queensland, new south wales, victoria, tasmania and south australia
Map of Australia’s National Electricity Market (NEM) connecting the eastern and southern states. Credit: Australian Energy Market Operator (AEMO).

More than one expert suggested that “grid” actually might not be the most illustrative term. Ariel Liebman, director of the Monash Energy Institute, highlights the potential for confusion owing to the aforementioned differences between technical engineering language and the broader industry or media usage. “I’d actually prefer to use the term ‘electricity system’ rather ‘the grid’,” he says.

Liam Wagner, an associate professor in energy and environmental economics at the University of Adelaide, points out that the grid doesn’t quite live up to the image of neat, interlocking squares that its name suggests. “You wouldn’t say that it’s square or rectangular or anything – it’s all over the shop like a spider’s web,” he jokes.

The systems for trading electricity and governing the NEM are very complex, but for our purposes, there are two types of key players you might want to know about: distributors and retailers.

Electricity distributors – for example, SA Power Networks in South Australia – own and maintain the distribution network. That includes poles, wires and electricity meters. You can’t choose your electricity distributor – it’s assigned based on where you live.

But you can choose your electricity retailer – the company that sells you your electricity. Retailers buy the electricity created by generators at a wholesale price on the NEM, and then sell this electricity to individual customers.

In essence, distributors own and operate the infrastructure for the grid, while retailers buy and sell the electricity itself. An organisation called the Australian Energy Market Operator, or AEMO, is responsible for managing wholesale electricity (and gas) markets and maintaining a secure energy supply.

Your 100% renewable electricity: how do they know?

Like many people, you may have chosen a 100% renewable plan from your electricity retailer. But have you ever wondered how they make sure that the electricity that reaches your house is renewable?

Sad to say that it doesn’t work quite like that.

By signing up for 100% renewable electricity, what you’re really doing is paying for the equivalent amount of electricity that your household consumes to be generated by renewable sources. The electricity that reaches you through your distributor is from all kinds of sources, both renewable and non-renewable, that feed into the grid and get mixed together.

In the end, the electricity that powers your lights or electric kettle may well come from wind or solar, but it could equally have come from a coal- or gas-fired power plant.

What is grid stability and why is it important?

‘Grid stability’ essentially means keeping electricity flowing through this network at a particular voltage and frequency.

It’s a delicate balance between supply and demand, because the network is very complex and can only operate within a fairly narrow range of both voltages and frequencies.

Equipment that uses electricity is designed to function at a specific frequency and voltage, and can be damaged if these values aren’t kept within a certain range. At a larger scale, problems with either voltage changes or frequency instability can trigger safety mechanisms that take parts of the grid offline, leading to blackouts.

Let’s deal with the voltage first. Increased demand for electricity causes voltage to drop; decreased demand causes it to spike.

You might have seen curtailment of rooftop solar power in the news in recent months – this is related to the difficulties of increased supply. If a rooftop solar system is producing more electricity than the building it’s on is consuming at a given time, the excess is fed into the grid, pushing up the voltage in local distribution lines.

What is the grid concept photo of a transformer on a concrete pole and some power lines against leaves and a blue sky in the background
A power transformer on a concrete pole and power lines in Canberra. Credit: Simon McGill / Moment / Getty Images.

What about frequency? This refers to the number of oscillations per second of the alternating current (AC) – the dominant form in which electricity is transmitted.  

In Australia, electricity is supplied to end users like you and me as AC at a frequency of 50 cycles per second, or 50 hertz.

“If the frequency starts to shift away from 50 hertz, it doesn’t have to go very far – like, 49.8 – and things don’t work properly anymore,” says Vassallo.

Large-scale instabilities in frequency can be caused by generators failing or going offline.

“If you have, say, four generators that are under the same power line, if the one in the middle goes offline, then they get out of sync,” Wagner explains.

“The power that’s coming down the line is essentially a sine wave that goes up and down and up and down. When you have these waves colliding in the wrong way, that’s what gives you frequency instability.”

He compares this scenario to ripples from two different stones dropped in a pond colliding and interfering with each other.

Mark Diesendorf, an honorary associate professor at the University of New South Wales specialising in sustainable energy, explains that when most electricity was generated by large fossil-fuel power stations, slowly rotating turbines that connected to the generators were used to stabilise electricity at the desired frequency.

With the increasingly diverse mix of electricity sources feeding into the grid, maintaining stability requires new approaches.

What does the grid’s future hold?

It’s clear that the way the grid has functioned in the past is not quite how it will work in the future.

According to Paul Roberts, head of corporate affairs at SA Power Networks, Australia is heading for an electrification revolution. “So much of what we’re doing is becoming digitalised and requiring electrical supply,” he says.

As a simple example, we’re now shopping online where we might have once gone to a physical department store.

“We’re starting to shift into using big data sources and artificial intelligence,” Roberts continues – not to mention the country’s almost inevitable transition to electric vehicles. “The way that we’re going as a society is going to make us more reliant on electricity.”

There’s also the aforementioned grid stability challenges and the increasing complexity of the electricity system to contend with.

“Instead of having two or three big power stations in South Australia, we now have hundreds and hundreds – actually, hundreds of thousands – of sources of power that need to be managed,” Roberts says, alluding to the increase in rooftop solar systems and renewable electricity farms. At the scale of the whole country, that translates to millions of sources. “It’s going from conducting a string quartet to conducting an orchestra.”

So what has been done, and could be done, to help the grid transition? The ability to store excess electricity and then release it when it’s needed is key to stabilising supply and demand.

Batteries are one obvious answer, and they come in different varieties. According to Diesendorf, while energy-dense lithium batteries have received a lot of attention for their applications in electric cars, vanadium redox or zinc bromide batteries may prove to be better and less expensive options for stationary electricity systems, where the battery doesn’t need to be so compact. 

“Batteries have proven their worth over the last five years or so, and I don’t think there’s much doubt now that they are becoming an integral part of the grid,” says Vassallo.

However, batteries aren’t so cost-efficient for long-term energy storage. For that, we can look to pumped hydro energy storage systems. These consist of two reservoirs of water at different heights, coupled with a power station. When energy is needed, the water in the upper reservoir is released and flows downhill to the lower reservoir, driving a turbine to generate electricity along the way. When energy supply is high, the water can be pumped back uphill so it’s ready to repeat the cycle.

Photo of water pumps going uphill from a reservoir in a pumped hydroelectric storage system
Lower reservoir and pipes in a pumped hydro system. Credit: Renelo / E+ / Getty Images.

Other technologies can help smooth out and stabilise frequency. For example, South Australia has recently installed four synchronous condensers, or synchrons, which contain a freely-spinning motor connected to the grid. Synchrons function similarly to the heavy turbines in a conventional fossil-fuel power station, providing the ability to maintain a stable frequency.

According to Diesendorf, the next generation of inverters for rooftop solar systems and renewable energy farms will also be able to maintain stable frequency, to the benefit of the entire grid.

“With modern power electronics, you can create any voltage and frequency you want,” he explains. “You don’t need any rotating machines at all.”

Building smarter and more sophisticated systems to manage a complex, decentralised grid is another key goal. Roberts points to virtual power plants, in which a number of households or electricity customers pool their solar and battery resources.

Vassallo agrees: “We haven’t seen enough of these local or smaller distributed systems coming into play, which actually increase the stability and resilience of major grids.

“At the very worst, they can disconnect and operate on their own if they have sufficient generation, storage and control. I think in decades to come, we are really going to rely on that diversity of supply and load that we don’t have at the moment.”

Those distributed systems could look like virtual power plants, neighbourhood batteries, or even using your electric vehicle as a mobile battery to locally stabilise the grid.

Finally, changing where transmission lines are built, in recognition of the fact that our energy will come from different sources, is another important consideration.

“Renewables are not going to be, for the most part, generated in the same places that coal-fired generation has been produced,” Wagner says.

“What we need to have is a significant build of transmission lines to be able to install more renewable energy all over the country.”

Diesendorf agrees, adding that due to time constraints, upgrading or building new transmission links is a matter of some urgency.

“You can plan and build a big wind or solar power plant in, say, three years,” he says. “But a new major transmission line like joining South Australia to New South Wales takes seven or eight years.”

Overall, experts emphasise that the grid doesn’t need to be rebuilt from scratch to accommodate the changing energy landscape.

“More wind, more solar, more batteries, more transmission,” is Wagner’s rather pithy summary.

We already have nearly all the technology we need. The task ahead is to implement this technology, as well as shifting the way we think about and govern the energy system.

“We need much, much more intelligent systems and a market which sends the right signals to people,” Vassallo says.

Multiple experts point to the bipartisan support offered by successive Labor and Liberal state governments in South Australia as facilitating the state’s transition to world leadership in renewable electricity.

“The main barriers to 100% renewable energy right now are more political than anything else,” says Diesendorf. “They’re not technological and they’re not economic.”

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