Module 2 — How electricity systems physically work
Lesson 5 of 7
Transmission and Distribution Networks
Learning objectives
By the end of this lesson you should be able to:
- Explain the difference between transmission and distribution networks.
- Understand why electricity is transported at different voltage levels.
- Describe the journey electricity takes from power stations to consumers.
- Explain why networks have physical limits.
- Understand how modern distribution networks are changing as consumers become active participants.
- Appreciate why location matters when operating electricity systems.
Introduction
Electricity rarely travels directly from a generator to a consumer.
Instead, it passes through a vast interconnected network of power lines, cables, substations and transformers.
This network is often called the grid.
Its purpose is simple:
To transport electricity from where it is produced to where it is needed.
However, transporting electricity is not as simple as moving goods by road or rail.
The electricity network must operate within strict physical limits.
Every line, transformer and cable has a finite capacity.
Electricity cannot simply be sent wherever market participants would like it to go.
Understanding how these networks are organised is essential for understanding both electricity engineering and electricity markets.
The journey of electricity
A simplified electricity system looks like this:
Primary energy source
↓
Generator
↓
Step-up transformer
↓
High-voltage transmission network
↓
Grid substation
↓
Distribution network
↓
Local transformer
↓
Homes, businesses and industry
Although this appears to be a simple chain, the real network contains thousands of interconnected paths and millions of connected devices.
Why use high voltage?
One of the biggest challenges in electricity systems is transporting large amounts of power efficiently.
When electricity flows through a conductor, some energy is lost as heat.
These losses increase with current.
Engineers therefore reduce current by increasing voltage.
For the same amount of power:
- Higher voltage means lower current.
- Lower current means lower losses.
- Lower losses mean more efficient transmission.
This is why electricity is transmitted over long distances using very high voltages.
Transformers make this practical by increasing voltage before transmission and reducing it again before electricity reaches consumers.
Transmission networks
The transmission network forms the backbone of the electricity system.
It transports very large quantities of electricity over long distances.
Transmission networks typically connect:
- Large power stations
- Offshore wind farms
- Major substations
- Large industrial users
- International interconnectors
Transmission lines often operate at hundreds of thousands of volts.
In Britain, for example, parts of the transmission system operate at:
- 132 kV
- 275 kV
- 400 kV
Transmission networks can be thought of as the motorways of the electricity system.
They move large quantities of electricity rapidly across the country.
Distribution networks
Once electricity reaches regional substations, it enters the distribution network.
Distribution networks deliver electricity to individual consumers.
They include:
- Regional substations
- Local substations
- Underground cables
- Overhead lines
- Pole-mounted transformers
- Service connections to buildings
Voltage is progressively reduced as electricity approaches consumers.
Typical voltage levels include:
- 33 kV
- 11 kV
- 400 V
- 230 V
These lower voltages are safer and suitable for homes and businesses.
Distribution networks are similar to local roads that connect individual properties to the wider transport system.
Substations
Substations perform several important functions.
They:
- Change voltage using transformers.
- Connect different parts of the network.
- Measure electrical conditions.
- Provide protection during faults.
- Allow equipment to be disconnected safely for maintenance.
Substations therefore act as major junctions within the electricity system.
Without them, electricity could not be transported efficiently or safely.
Radial and meshed networks
Electricity networks are not all built in the same way.
Transmission networks
Transmission systems are usually meshed.
Multiple routes connect different parts of the network.
If one line becomes unavailable, electricity can often flow through alternative routes.
This improves reliability.
Distribution networks
Distribution systems have traditionally been radial.
Electricity normally flows outward from a substation towards consumers.
A typical feeder supplies many homes from a single source.
This structure is simpler and less expensive than a fully meshed network.
However, it offers fewer alternative paths if equipment fails.
One-way power flows
Historically, electricity systems were designed around one-way power flows.
Large generators produced electricity.
Transmission networks transported it.
Distribution networks delivered it.
Consumers simply consumed it.
The direction of power flow was therefore predictable.
Electricity moved from the centre of the system towards its edges.
Many engineering standards, protection systems and operational practices were developed around this assumption.
Two-way power flows
Today's electricity system is changing rapidly.
Consumers increasingly own technologies such as:
- Rooftop solar panels
- Home batteries
- Electric vehicles
- Heat pumps
These devices can both consume and produce electricity.
A household may:
- Import electricity overnight.
- Export solar power during the afternoon.
- Charge a battery when electricity is cheap.
- Supply electricity back to the network later.
Power therefore no longer flows in only one direction.
Distribution networks are becoming active systems rather than passive delivery networks.
Why location matters
Suppose a country has enough generation overall.
Does that guarantee every consumer can receive electricity?
No.
Electricity must travel through physical infrastructure.
Imagine:
- A wind farm in Scotland.
- High demand in London.
- Transmission lines between them operating near their limits.
Although there may be sufficient generation nationally, not all of it can necessarily reach the required location.
The network itself becomes the limiting factor.
This is why electricity is fundamentally a spatial problem.
Where electricity is generated matters almost as much as how much is generated.
Network capacity
Every component of the network has a finite rating.
Power lines can carry only a certain amount of current.
Transformers have maximum operating limits.
Switchgear is designed for specific fault levels.
If equipment operates beyond these limits, it may overheat, become damaged or operate unsafely.
Operators must therefore ensure that network loading remains within acceptable limits.
Building larger networks increases capacity but also requires significant investment.
Network losses
Not all electricity generated reaches consumers.
Some energy is lost while travelling through the network.
Losses occur because electrical resistance converts part of the transmitted energy into heat.
These losses depend upon factors such as:
- Current
- Network loading
- Cable characteristics
- Line length
- Temperature
Higher current generally produces larger losses.
Reducing unnecessary power flows therefore improves overall system efficiency.
Congestion
Sometimes more electricity attempts to flow through part of the network than it can safely carry.
This is known as congestion.
Congestion can arise because:
- Demand is unusually high.
- Renewable generation is particularly strong.
- Equipment is unavailable.
- Maintenance is taking place.
- A fault has changed power flows elsewhere.
When congestion occurs, operators cannot simply ignore the physical limits.
Instead they must:
- Redispatch generation.
- Reduce demand.
- Curtail renewable output.
- Reconfigure the network.
- Use storage or flexibility where available.
Congestion is one of the main reasons electricity markets increasingly consider location.
Distribution networks are becoming smarter
Historically, many distribution networks contained relatively little real-time monitoring.
Operators often had detailed visibility of the transmission system but much less information about individual distribution feeders.
This is changing.
Modern distribution systems increasingly include:
- Smart meters.
- Network sensors.
- Intelligent substations.
- Automated switches.
- Communications networks.
- Distributed control systems.
These technologies improve visibility and allow more efficient use of existing infrastructure.
They also support increasing numbers of distributed energy resources.
Distribution System Operators
Traditionally, distribution companies focused primarily on building and maintaining infrastructure.
Today they increasingly perform operational functions.
Modern Distribution System Operators (DSOs) may:
- Monitor network conditions.
- Manage distributed flexibility.
- Connect distributed generation.
- Coordinate electric vehicle charging.
- Manage local congestion.
- Support system restoration.
The distribution network is therefore becoming an active operational system rather than simply passive infrastructure.
The network is not a pipe
It is tempting to think of electricity networks as pipelines.
This analogy is useful only up to a point.
Unlike water flowing through a pipe:
- Electricity follows the physical laws governing the entire interconnected network.
- Power naturally divides between available paths.
- Operators cannot instruct individual electrons to follow a particular transmission line.
- Commercial contracts do not determine the physical flow.
The network therefore behaves as a coupled physical system rather than a collection of independent transport routes.
This distinction becomes critical when we discuss electricity markets later in the course.
Why transmission and distribution matter for markets
Traditional commodity markets often assume transport is relatively straightforward.
Once goods have been purchased, they can usually be delivered using available logistics.
Electricity is different.
The network itself determines whether energy can physically be delivered.
A generator may be willing to sell electricity.
A consumer may be willing to buy it.
However, if the network cannot safely transport the required power, the transaction cannot be fully realised physically.
Markets therefore cannot ignore the engineering characteristics of the electricity network.
Key takeaways
- Electricity is transported through interconnected transmission and distribution networks.
- High voltages reduce losses and make long-distance transmission more efficient.
- Transmission networks move large quantities of electricity over long distances.
- Distribution networks deliver electricity to homes, businesses and increasingly connect distributed energy resources.
- Every network component has finite physical limits.
- Modern electricity systems increasingly experience two-way power flows.
- Congestion occurs when power flows approach or exceed network capacity.
- Distribution networks are becoming increasingly intelligent and actively managed.
- The physical network determines how electricity can flow, regardless of commercial agreements.
Looking ahead
Understanding the physical network is only part of the story.
Every transmission line, transformer and generator also operates within engineering limits relating to temperature, voltage and system stability.
In the next lesson, we explore these thermal, voltage and stability constraints, and explain why respecting them is essential for keeping the electricity system secure.