Part of a new industry series: Powering the Future™: Climate Risk Intelligence For The Energy Industry
The electric grid is one of the most complex and vital infrastructures in the modern world, an extensive, interconnected system designed to deliver electricity from power plants to consumers in real time. Often called the world’s largest machine, the grid consists of three main components: generation, transmission, and distribution. Together, these elements form the backbone of electric utilities’ operations and serve as the foundation for evaluating and managing climate risk.
Generation refers to the process of producing electricity, whether from fossil fuels like coal and natural gas, nuclear reactors, renewable sources such as wind and solar, or emerging technologies like hydrogen and geothermal. These generation facilities vary greatly in size, location, fuel type, and operational features, which in turn affect both their exposure to climate hazards and their ability to respond to changing demand.
Once generated, electricity is increased to high voltages, often between 69,000 and 765,000 volts, and transmitted over long distances through the transmission system. This network of high-voltage power lines, substations, transformers, and control centers links generating stations with population centers and industrial zones. Transmission infrastructure is especially vulnerable to climate-related impacts, including wildfires, hurricanes, icing, and extreme heat, all of which can reduce performance or cause system-wide outages.
Finally, electricity reaches consumers through the distribution system, a vast network of lower-voltage lines, poles, underground cables, and local substations. This “last mile” infrastructure delivers power to homes, businesses, hospitals, data centers, and critical services. It is the most physically vulnerable part of the grid and faces serious risks from storms, flooding, and heat waves that can disrupt service and endanger lives.
Underlying the entire grid are control systems like SCADA (Supervisory Control and Data Acquisition) networks that monitor and manage electricity flow in real time. These digital tools are vital for balancing supply and demand and responding to disruptions—yet they also face cybersecurity threats and climate-related operational risks.
Understanding the structure of the electric grid is essential for grasping how climate risk affects various parts of utility operations. It also highlights the need for integrated planning: no single part of the grid works alone. Climate resilience must be developed across the entire system.
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