However, in the late 19th century the components needed for electrification began to be developed. The key invention was made by both Joseph Swan  (1828-1914)  in Britain and Thomas Edison  (1847-1931)  in the USA — the incandescent light bulb. This invention did away with the necessity for the carbon arc which had always been difficult to control.

The first company to manufacture electric generating machines was the French company Souite Générale d'Electricité and, in fact, Paris played a major role in the early development of practical electrical technology. At one point the city was dubbed the "Cité d'Electricité".

As electricity began to be more widely used, a long term debate — sometimes amounting to a major dispute — over the comparative usefulness of alternating current (AC) compared with direct current (DC) occurred. This argument was never fully resolved and resulted the supply of both AC and DC current up until the middle of the 20th century.

By the end of the 19th century, it was by no means unusual for individual companies or people to install their own supply to their factory or (large) home. Some scientific figures, such as William Crookes  (1832-1919)  and Lord Armstrong (Sir William Armstrong)  (1810-1900) , lit their own homes using electricity from their own generators. Often the generator was driven by steam, supplying direct current for lighting.

Nevertheless, the main demand for electricity early on was for street lighting. The first public experimental electrical supply was provided in 1881, when the streets of Godalming were lit electrically using water power. For this kind of use to be taken further, it made sense to try and build a central distribution supply and the first such plant, at Holborn Viaduct, opened in 1882.

These forms of public supply were set up either by private companies created for the purpose or by local authorities. Both needed statutory authority to put cables and pylons on other peoples' land and to lay cables in streets, both of which were regulated by Acts of Parliament.

By 1900, it was clear that electric lighting was as good as gas lighting, and likely to overtake it in popularity. The demand for lighting was, of course, largely at night. Power suppliers found that if they were to meet peak night demand, they needed demand during the day as well, otherwise they over-produced. So, suppliers were pleased to see the extension of the use of electric power to traction — in the form of electric trams (such as Blackpool Promenade Tramway).

Under the pressures of the World War I, the government established the Electric Power Supply Committee in 1915. The committee found that there were over 600 separate electricity undertakers in operation across the country, most of which were too small to be economical. Their average generating capacity was 5,000hp. The committee recommended the appointment of electricity commissions that would divide the country into district boards. These would take over power generation and distribution in their area.

In effect, this was a proposal for nationalisation — not at this stage carried through. However, the Electricity (Supply) Act 1919 created joint electricity authorities with the agreement of the statutory undertakers concerned. Each of the new authorities would acquire all the power stations in their area and build new ones on a larger, more economically efficient scale. Furthermore, to improve generating efficiency the authorities would interconnect a number of systems, enabling power to be switched around the country in response to supply and demand.

Further legislation was required and the joint authorities' committee recommended the bill that became the Electricity Supply Act 1925. This created the Central Electricity Board (CEB), which established the National Grid transmission system, linking the biggest and most efficient power stations across the country and supplying power to existing undertakings. This also resulted in the construction of further power stations.

One of the major purposes of the CEB was to promote the use of electricity by industry. By 1936, about 80% of the available supply was used in this sector, although many industrial companies continued to rely on their own oil or gas engines to generate electricity for lighting.

Domestic use was originally very limited but gradually expanded from use only by the wealthy. Local authorities used an assisted wiring scheme to encouraged people to connect their houses. The scheme began in 1930, and by 1936 over 12,000 premises had been connected.

Electrification did not go entirely smoothly, however, as many people in the countryside objected to the building of pylons and this led to some protracted disputes. Nevertheless, the electrical industry developed a highly successful marketing strategy in the 1930s, the most striking feature of which was to associate electricity with the idea of modernity.

Throughout the World War II, electricity continued to be provided by local companies. Following the election of a Labour government in 1945, many key industries were taken into State ownership, including the electrical industry, which was nationalised on 1st April 1948.

The key body established by the nationalisation Act was the Central Electricity Generating Board (CEGB), which became the cornerstone of the industry in Britain for nearly 50 years. The CEGB was now responsible for electricity generation in England and Wales. In Scotland, electricity generation was carried out by the South of Scotland Electricity Board and the North of Scotland Hydro-electric Board.

Because the new nationalised industry began in a period of post-war austerity — when demand grew rapidly but availabilty of plant and fuel was unreliable — it largely saw its mission as providing an adequate and secure supply ("to keep the lights on") rather than necessarily pursuing the cheapest power generation route. However, this changed over time as advantage was taken of economies of scale. This change was aided by the fact that most of the senior staff were professional engineers and had excellent support in financial and risk management areas.

At the heart of the CEGB's infrastructure was the National Grid Control Room, which for a time was located in London and was part of the control hierarchy for the National Grid system. There were also both Area and District Grid Control Rooms, which to start with were located in Newcastle, Leeds, Manchester, Nottingham, Birmingham, St Albans, East Grinstead and Bristol.

The rooms were manned by Control Engineers, who worked round-the-clock shifts. They were responsible for costing, scheduling and load-despatching a cost-effective level of electricity generation to the main interconnected system (the 400/275/132kV network ... see supplying electricity) at an ample level of security. They also held details of both the running costs and availability of every power plant in England and Wales.

At these control centres they would continuously predict demand and supervise, directing power stations to either increase or reduce production, or to cease production altogether. They used what was known as the 'merit order' — a method used to rank each generator in the power stations based on how much each cost to produce electricity. The idea was to make sure that production was always achieved at the lowest possible cost.

The CEGB also possessed an extensive research and development section. It had three principle laboratories: the Central Electricity Research Laboratory at Leatherhead in Surrey, Marchwood Engineering Laboratory near Southampton, and Berkeley Nuclear Laboratories near Gloucester. At one time there were also five regional offices.

Up until the 1970s it was widely considered that the State-owned Electricity Supply Industry (ESI), of which the CEGB was a part, represented the best of government planning. The ESI was managed in a generally similar way to large private-sector energy companies, such as the partially State-owned BP (British Petroleum). But the CEGB was too slow to react to the shifting patterns of energy supply that occurred following the second oil crisis (1978-80), and it came to be seen as a monolith that demonstrated the worst aspects of central planning. It was now thought suitable for restructuring.

Privatisation (or de-nationalisation) of the ESI — particularly the CEGB — began in 1990. The CEGB was initially broken up into two generating companies (National Power and PowerGen), with the National Grid Company responsible for transmission. The nuclear component of the CEGB was at first vested in National Power. The Area Electricity Boards, of which there were 12, were privatised as single entities and became Regional Electricity Companies (RECs).

Interestingly, the nuclear component of National Power came to be removed and vested in a new, still State-owned, company called Nuclear Electric. This was in turn privatised in 1995. Nuclear Electric controls all the Advanced Gas Cooled Reactos (AGRs) and the sole Pressurised Water Reactor (PWR). However, the CEGB's older Magnox reactors have stayed in public ownership under the name Magnox Electric. These were later combined with British Nuclear Fuels (BNFL).

Today, PowerGen is owned by the German utility company EON.
National Power was split into a UK business called Innogy — now owned by the German utility company RWE — and an international business called International Power.

The transmission company, National Grid, was floated on the Stock Exchange in 1995. After merging with Lattice Group (the owners of Transco), and a number of name changes, since 2005 it has been known as National Grid plc.