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Grid 101: How the American Energy Grid Works
From the national grid to energy-producing regions — why using power closer to where it’s made matters.
When we flip a switch and a light turns on, we typically don’t think about the electric grid. But behind that everyday moment is a huge system that has to stay balanced every second of every day.
Understanding that balance helps explain the magic behind routine aspects of modern life — and explains why the geographic distance between where energy is produced and where that energy is used is quite important.
This blog series will cover three key aspects:
- Part 1: The American energy grid, explained
- Part 2: How MISO powers the Heartland
- Part 3: Our region’s role in our energy grid
Part 1: The American Energy Grid, Explained
“The grid” sounds like an abstract concept (a lot like “the web” or “the cloud”), but it’s a very real thing made up of physical infrastructure — and powered by some of the core concepts of physics and economics.
The energy grid is the system that moves electricity from where it is made to where it is used. The purpose of the grid is simple: keep power flowing reliably.
This system is comprised of three core elements: generation (energy supply), load (energy demand), and transmission (energy transport):
Why Electricity Needs to Be Used Immediately Once Generated
One important thing to note about the energy grid: there is (currently) no effective way to store energy once it’s turned into electricity. Whether it’s a more traditional gas-fired plant or a wind turbine or solar farm, once that fuel source is converted into electricity, it needs to be used in short order.
That means power generation (supply) needs to be carefully calibrated: the grid needs to have enough energy available to meet demand, but the amount of energy on the grid also can’t exceed demand.
What About Batteries?
Battery technology is now robust and reliable enough to power long-range electric vehicles (EVs), but “grid scale” batters are an entirely different level.
While large-scale energy storage technology is rapidly advancing, we still don’t have nearly enough battery storage to hold a meaningful amount of energy at the scale the grid requires.
It’s a lot like agriculture in many ways: We want to make sure we grow enough to feed America and meet the broader demands of the economy. But once crops are harvested, many need to be used in relatively short order because there’s no effective way to store them for the long term. So, farmers want to have a reasonable understanding of demand before they start growing crops — or they could be in trouble come harvest time.
Regional Transmission Organizations (RTOs): The Local Traffic Controllers
North America’s power system is divided into three main sectors, called interconnections:
Source: U.S. Environmental Protection Agency. U.S. electricity grid and markets. https://19january2021snapshot.epa.gov/greenpower/us-electricity-grid-markets_.html
Think of these as three big neighborhoods of electricity, each managing its own balance and reliability, mostly independent from one another.
Within each neighborhood are groups called Regional Transmission Organizations (RTOs). Importantly, RTOs are not in the business of producing energy. They’re nonprofits that manage the grid across a specific region. Their first job is reliability: when someone flips a switch, the power should be there.
RTOs are like traffic managers, watching:
- How much electricity is being used
- How much electricity is being generated
- Where the pressure points are on the system
Source: Federal Energy Regulatory Commission. RTOs and ISOs. https://www.ferc.gov/power-sales-and-markets/rtos-and-isos
Read Part 2: Zoom in on Our Region and Learn What Makes MISO Unique
Understanding how electricity is generated, how it’s used, and how it moves across the country helps set the foundation for Part 2, where we’ll take a closer look at MISO, the organization responsible for balancing the grid across the Midwest. We’ll dig into some of the unique complexities of how supply and demand interact across that system — and why the relative location of supply and demand starts to matter.
