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Basic facts about electric power
Electric power is the product of two quantities: current and voltage. These two quantities can vary with respect to time (AC power) or can be kept at constant levels (DC power).
Most refrigerators, air conditioners, pumps and industrial machinery use AC power whereas most computers and digital equipment use DC power (the digital devices you plug into the mains typically have an internal or external power adapter to convert from AC to DC power). AC power has the advantage of being easy to transform between voltages and is able to be generated and utilised by brushless machinery. DC power remains the only practical choice in digital systems and can be more economical to transmit over long distances at very high voltages (see HVDC).
The ability to easily transform the voltage of AC power is important for two reasons: Firstly, power can be transmitted over long distances with less loss at higher voltages. So in power systems where generation is distant from the load, it is desirable to step-up (increase) the voltage of power at the generation point and then step-down (decrease) the voltage near the load. Secondly, it is often more economical to install turbines that produce higher voltages than would be used by most appliances, so the ability to easily transform voltages means this mismatch between voltages can be easily managed.
Solid state devices, which are products of the semiconductor revolution, make it possible to transform DC power to different voltages, build brushless DC machines and convert between AC and DC power. Nevertheless devices utilising solid state technology are often more expensive than their traditional counterparts, so AC power remains in widespread use.
Power in an electric circuit is the rate of flow of energy past a given point of the circuit. In alternating current circuits, energy storage elements such as inductors and capacitors may result in periodic reversals of the direction of energy flow. The portion of power that, averaged over a complete cycle of the AC waveform, results in net transfer of energy in one direction is known as active power (sometimes also called real power). The portion of power due to stored energy, which returns to the source in each cycle, is known as reactive power.
About electric industry
The electric power industry is the generation, transmission, distribution and sale of electric power to the general public. The electrical industry started with introduction of electric lighting in 1882. Throughout the 1880s and 1890s, growing economic and safety concerns lead to the regulation of the industry. Once an expensive novelty limited to the most densely populated areas, reliable and economical electric power has become a requirement for normal operation of all elements of developed economies.
By the middle of the 20th century, electric power was seen as a "natural monopoly", only efficient if a restricted number of organizations participated in the market; in some areas, vertically-integrated companies provides all stages from generation to retail, and only governmental supervision regulated the rate of return and cost structure.
Since the 1990s, many regions have opened up the generation and distribution of electric power to provide a more competitive electricity market. While such markets can be abusively manipulated with consequent adverse price and reliability impact to consumers, generally competitive production of electrical energy leads to worthwhile improvements in efficiency. However, transmission and distribution are harder problems since returns on investment are not as easy to find.