A Brief History of Electricity (1900 - 2000)

First half of the 20th century was the golden period of Electric Power Industry. During this period the focus was on increasing capacity and improving efficiency. A key insight that came early in the 20th century was of "economies of scale (i.e. big is better!)".

• In 1903 Samuel Insull installed a 5MW generator in Chicago and managed to increase his load factor (average load / maximum load) to increase profits.
• In 1907 Insull further realizes that profitability from managing economies of scale and load factor grows with corporate size, and so buys all of his competitors.
• In 1907, States begin to recognize that electric companies are constitute natural monopolies with large economies of scale requiring huge capital investment, and that it was not socially efficient to have multiple competitor

Based on the realization of bigger is better, the trend rapidly moved to larger and larger centralized power plants.

It was also clear that higher transmission voltage meant lower transmission loss. 

AC vs DC - A Historical Perspective

Ever wondered why AC current is the dominant way of transmitting and distributing power to the household? The original system developed by Edison were based on DC transmission. While Edison found the "killler app" for electricity, namely the light bulb, the AC system that is deployed world wide today was developed by Nikola Tesla for George Westinghouse. The key "sustainable" differentiation for AC over DC was the ability to convert voltages from one level to another by  the use of "Transformers". Transformers allowed AC current to be transmitted at much higher voltage (thereby, allowing power to be transmitted for longer distances by using less wiring --> cheaper) and then be down-converted to a suitable low voltage (e.g. 110V) for use at the loads.

Here is a fascinating history of the AC vs DC war. For a brief history of electricity, please check out this post.