How electricity gets to your home or business
There are 3 main steps for electricity to reach your home or business.
1. The electricity is generated
Electricity is made by:
- coal-fired power stations (becoming less common)
renewable energy sources, like solar farms, wind farms and rooftop solar panels on homes and businesses (becoming more common)
The renewable energy is stored by batteries and pumped hydro systems so we can access it later when demand for energy is high.
2. The electricity is moved through the grid
After the generators produce electricity, it travels through the electricity grid. This is a huge network of poles, wires, substations and transmission lines. Together, they connect electricity from where it's made to where it's used.
How it works:
- Transmission lines carry electricity over long distances, sometimes hundreds of kilometres.
- Substations lower the voltage to make it safe and direct the energy where it needs to go.
- Distribution lines deliver electricity into your home or business.
If you're generating your own energy using solar panels, your home or business uses it first, and any extra goes back into the grid.
The company that owns and operates this infrastructure is called an energy distributor. If there's a power outage or damage in your area, they are responsible for fixing it. In NSW, there are 3 energy distributors – Ausgrid, Endeavour Energy or Essential Energy. Your distributor depends on where you live. Find out who is your energy distributor.
3. The electricity is delivered to your home and business
Energy retailers then buy the electricity from a national energy marketplace and sell it directly to you. Your energy retailer is the company that sends you your energy bill.
How it works:
- You choose a retailer and a plan that suits your needs.
- Retailers charge you for the electricity you use and manage your connection to the grid.
If you generate your own renewable energy, you can sell any extra energy back to the grid, and your retailer will apply a small discount to your energy bill.
