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The Evolution of the Utility Industry

The history of power and utilities goes back a long way, even before the American Revolution! The development of the electric utility industry paved the way for the modern world. Without large-scale energy industries, we would have never been able to build large factories, communication tools, or the internet.

It’s easy to take the electric power industry for granted, but modern power generation is only possible thanks to the great minds behind the original electric companies! Their innovations in electricity and fuel made it possible to build the world we live in today.

A Brief History of Electricity

Many people believe that electricity began with Ben Franklin and that electric lighting a mass electric power debuted as a result of the work of Thomas Edison. However, humans have known about the existence of electricity since ancient times.

There are a few known examples of this, such as the ancient Egyptians and ancient Greeks. The ancient Egyptians documented the phenomenon of bioelectricity in catfish. The ancient Greeks studied and pondered the effects of static electricity on small objects.

The practical study of electricity ramped up during the 18th century. Then, in the 19th century, innovators ushered in the energy transition and laid the foundation of the modern electric power industry.

Power to the People

Expanding the power and utilities infrastructure literally brought power to the people, but it took a long time and a lot of money. Fortunately, with expansion, power generation got cheaper – a phenomenon called an economy of scale. Every new customer provided additional cash flow for expansion, and with each expansion, the overall production cost of electricity decreased.

The early electric utility industry was a fiercely competitive market, which had a side effect of business inefficiency that resulted in higher costs. In order to maximize efficiency, policymakers legislated a centralized business model under which utility companies would legally operate monopolies within specific geographical areas. These monopolies would integrate production, maintenance, and tracking of electricity.

By eliminating competition, electric companies actually saved end users money – for a while. However, in 1978, between two back-to-back energy crises, the Jimmy Carter administration formed the Department of Energy and introduced the Public Utility Regulatory Policies Act (PURPA). The goal of this act was to bring competition back into energy industries to encourage innovation.

Fueling Progress

The history of electric companies starts with Thomas Edison in the late 19th century. At the time, the world ran on kerosene and coal. After inventing the incandescent light bulb, Edison partnered with local officials to install the first central power station in New York City.

The 20th century saw the growth of the petroleum industry with the mass production of the compact internal combustion engine under Henry Ford. During this time, factory production shifted from steam power to electric power, which made mass production methods easier to scale.

For over a century, power and utilities were fueled almost exclusively by non-renewables. Hydroelectric power debuted concurrently with fossil fuels, but it proved harder to scale. One major problem hydroelectric generators faced was that they required large, natural sources of water that weren’t always readily available.

The 1970s ushered in an energy crisis that changed Americans’ relationship with electric power. Trade wars led to sharp increases in the prices of energy and decreased availability of fuels in the United States. Other nations, like Japan, didn’t face the same obstacles. This allowed automotive and machinery industries to bloom all over the world as the United States struggled.

The Ancient Origins of Renewable Energy

For millennia, humans relied entirely on renewable energy. Ancient societies built empires with animal-drawn carts, windmills, water wheels, firewood, and geothermal baths. Unfortunately, ancient forms of renewable energy are difficult to scale and take time to replenish. For example, humans and animals must eat and rest, the wind doesn’t blow all the time, and forests can take decades to grow.

In order to meet the growing demand for energy, humans invented charcoal. Charcoal allowed for the creation of steel, which triggered the shift from the Bronze Age into the Iron Age. Then,Tthe 18th century saw the mass adoption of coal and coke in blast furnaces, as well as steam engines. These technological advancements allowed the mass manufacture of stronger steel and concrete.

Unfortunately, the wide adoption of fossil fuels swiftly led to wars and lasting environmental damage. Ownership of the fuel supply has been a major source of conflict throughout human history. Now, due to high consumption, climate concerns, and resources that growing scarcer, the energy industry is turning to renewable energy. Here are some methods the energy industry is using to better meet modern demands:

  • Hydroelectric power (rivers, dams, and reservoirs)

  • Wave power (ocean)

  • Wind turbines

  • Solar panels

  • Geothermal

  • Biomass

The Debut of Modern Smart Power Grids

Digitization has created ways for electric companies to generate and distribute power more efficiently than ever. Historically, power consumption was tracked and billed according to meter readings taken by representatives of the power companies. Also, power outages could only be identified by end-users –– and without power, it made it difficult to report and resolve outages in a timely manner.

Digital tools allow for instant, accurate sensing and measurement of power consumption and availability. As a result, smart grid technologies are more efficient. Power companies have been able to build a more resilient grid with better insulation and redundancies to supply backup power in the case of emergencies.

The energy industry is synchronizing with modern renewable and scalable energy solutions. This will help make a stronger, safer, and more sustainable power supply. As a result, the energy and utilities industry is expanding faster than ever and Blackwood Resources is here to help.

Blackwood Resources offers efficient, reliable infrastructure scaling services for utility companies that are ready to grow. Learn more about what Blackwood Resources can do for you today!


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