An electric power system is a network of electrical components deployed to supply, transfer, and use electric power. An example of an electric power system is the network that supplies a region's homes and industry with power—for sizeable regions, this power system is known as the grid and can be broadly divided into the generators that supply the power, the transmission system that carries the power from the generating centres to the load centres and the distribution system that feeds the power to nearby homes and industries. Smaller power systems are also found in industry, hospitals, commercial buildings and homes. The majority of these systems rely upon three-phase AC power—the standard for large-scale power transmission and distribution across the modern world. Specialised power systems that do not always rely upon three-phase AC power are found in aircraft, electric rail systems, ocean liners and automobiles.
In 1881 two electricians built the world's first power system at Godalming in England. It was powered by a power station consisting of two waterwheels that produced an alternating current that in turn supplied seven Siemens arc lamps at 250 volts and 34 incandescent lamps at 40 volts. However supply to the lamps was intermittent and in 1882 Thomas Edison and his company, The Edison Electric Light Company, developed the first steam powered electric power station on Pearl Street in New York City. The Pearl Street Station initially powered around 3,000 lamps for 59 customers. The power station used direct current and operated at a single voltage. Direct current power could not be easily transformed to the higher voltages necessary to minimise power loss during long-distance transmission, so the maximum economic distance between the generators and load was limited to around half-a-mile (800 m).
That same year in London Lucien Gaulard and John Dixon Gibbs demonstrated the first transformer suitable for use in a real power system. The practical value of Gaulard and Gibbs' transformer was demonstrated in 1884 at Turin where the transformer was used to light up forty kilometres (25 miles) of railway from a single alternating current generator. Despite the success of the system, the pair made some fundamental mistakes. Perhaps the most serious was connecting the primaries of the transformers in series so that active lamps would affect the brightness of other lamps further down the line.