How the world’s first electric grid was built

In 1918, fifty systems supplied London’s electricity. Turning these into a grid required war, nationalization, and an act of engineering insubordination.

In 1883, Sir Coutts Lindsay, owner of the Grosvenor Art Gallery in Bond Street, decided that he wanted to illuminate his paintings without the smoke produced by gas lanterns. He installed a small generator, first in the yard and then in the basement of the gallery. This was a cutting-edge status symbol at the time. The generator turned out to produce more than enough electricity to power his gallery lights, so he started to supply the excess power to his neighbors via overhead cables.

In 1887, after being pitched by a professional engineering team, Sir Coutts formed the London Electricity Supply Corporation. To spare passersby the noise of the generator, to gain access to cooling water, and to allow it to buy cheaper coal transported by river, the corporation moved to a new base in Deptford. The Deptford facility was linked by cables to substations at the Grosvenor Gallery, Trafalgar Square, and Blackfriars. By 1891, the world’s largest generator and one of the world’s first modern power stations was up and running.

For its first decade, the project struggled as cost overruns, frequent fires, challenges meeting public demand, and a fatality during a government inspection made profits elusive.

The story of Coutts Lindsay and the London Electricity Supply Corporation is typical of the early days of electricity supply, not just in the UK, but around the world. Uncoordinated local efforts struggled with growing demand and the absence of economies of scale. In New York, Thomas Edison’s Pearl Street Station, completed in 1882, became one of the first centralized power plants. It served an area of one square mile.

The early market for electricity generation and distribution was chaotic. The first two decades of the 20th century saw UK local authorities and a grab bag of private companies locked in bitter and counterproductive competition with each other. Between 1900 and 1913, 224 new generation projects came online, at varying voltages, frequencies of supply, and using different kinds of current, and almost all using their own cables. In 1918 London, there were 50 different systems, ten different frequencies, and 24 voltages in operation.

The lack of standardization in early electricity systems caused problems. It meant that electric equipment designed for one power source couldn’t work with another. If a motor was built for one frequency, it could run too fast and overheat if operated on another. An electric iron designed for a DC system wouldn’t work on an AC one. Industrial equipment couldn’t easily be standardized across regions. Electricity suppliers rendered themselves uneconomical by building parallel distribution networks.

Grids and why we need them

The two most common forms of current are alternating current (AC) and direct current (DC). AC works by running a current back and forth, contrasting with DC, which flows in only one direction. Thanks to these frequent direction reversals, AC creates a changing magnetic field that induces voltage in another coil of wire through electromagnetic induction. This field means it is easy to step voltage up or down, depending on the number of coils in this transformer wire. DC, with a static magnetic field, is unable to do this efficiently.

AC is the backbone of modern electricity systems. Power is transmitted over a long distance at a higher voltage to minimize power loss, and then stepped down to lower voltages at substations. The higher voltage means the same power is transmitted with less electrical current flowing through the wires, resulting in less energy being wasted as heat.

The London Electricity Supply Corporation were early pioneers in the use of AC. But they struggled against local operators who would cheaply knock together small DC networks, an approach popularized by Edison. These networks could effectively illuminate local neighborhoods, but not transmit electricity efficiently over any meaningful distance.

DC, however, benefitted from an incumbency advantage. Early electrical devices had been designed for DC, while the development of AC components like electrical motors initially lagged behind. DC proponents like Edison also stoked public fear of AC, arguing that higher voltages would be dangerous. Edison went as far as staging public demonstrations of animals being electrocuted by AC.

The First World War drove home the shortcomings of this approach. Coal prices more than doubled when munitions factories faced massively increased demand just as coal miners were being enlisted. These spiraling costs led factories to abandon their private generators and ask to be connected to municipal electricity projects. However, there was a shortage of both generators and factory capacity to manufacture them. Electricity demand increased more in those four years than it had in the prior 32, but thanks to their inefficiency, many local electricity undertakings still failed to be profitable, relying on a mix of municipal subsidy and wealthy investors.

This shortage of generators led the government to restrict the creation of private generation capacity and to strongly encourage manufacturers to move to AC. Meanwhile, municipal electricity projects started to connect to one another (known as interconnection), so they could back each other up during periods of high demand, building resilience into the public system.

Parliamentary reports during 1918 and 1919 proposed the quasi-nationalization of the industry. They concluded that the UK needed to move from local generation projects to a national network. MPs, however, saw this as too radical and opposed any form of coercion. As a result, they passed the weaker Electricity (Supply) Act of 1919. This established regional joint electricity authorities: statutory bodies tasked with expanding interconnection between local projects.

The joint electricity authorities, along with the government’s electricity commissioners, lacked any powers of compulsion. They could hold local consultations to try to persuade operators to interconnect their infrastructure, but would routinely run into local opposition. Companies saw little incentive to change, were reluctant to work with their competitors, and commissioners struggled to navigate a world of petty municipal rivalry.