Traditionally the producers were large power plants. However, in recent years the system has become more complex as consumers have also increasingly become small-scale producers. The grid is divided into transmission grids and (regional and local) distribution networks. The transmission grid is like a highway that transports electricity with high voltage over long distances.
Electricity is conducted from the transmission grids to regional and local networks, which provide energy for daily consumption to households, companies, transport systems and heavy industries. In several places between producer and consumer, the electricity passes transformer stations that reduce the voltage.
TSO provides backbone grid
Each country has one or more system administrators – also referred to as Transmission System Operators (TSOs) – which operate, maintain and develop the transmission grid. The primary purpose is to provide a secure and reliable backbone infrastructure. TSOs also work together to develop a common European transmission grid. The TSO is often, but not always, owned by the state.
Ownership of regional and local networks is divided between private and public operators - also referred to as Distribution System Operators (DSOs). Each owner has the exclusive right and duty to make the grid available to consumers within a geographic area, and is thus responsible for connecting everyone within this area to the network.
Infrastructure monopoly a practical solution
Households and companies can choose their electricity supplier just as they choose the brand of car they drive. But just as they are unable to choose a road construction contractor, they are unable to choose their network company. The main reason for this infrastructure monopoly is that, for practical and cost-related reasons, there is only one grid – just as there is only one road system.
In order to make electricity distribution more efficient, allow more renewable generation as well as provide for new electricity uses, like electrical cars, moves are underway to create a European energy system based on a smarter grid.