Currently, the transmission of electrical energy from bulk power generators all the way to household, commercial and industrial consumers is made mostly through high voltage alternating current (AC) transmission and distribution systems, and through a series of voltage transformations to reduce losses and minimize cost. Voltage levels used are of standard values.

AC system is used in the transmission of bulk power, instead of DC (Direct Current), because of its ability to transform voltage to various levels using a transformer. The voltage transformation follows the faradays Law which states;

The emf induced in a circuit is directly proportional to the time rate of change of magnetic flux through the circuit.

Note that, at higher voltage, the current was reduced thus voltage drop and line losses were also reduced.

Ability to transform voltage and to flow power in two opposite directions (bidirectional) are the only major advantages of AC system over DC system.

DC transmission system on the other hand has more advantages over AC transmission system:

1. Reactance.
DC system does not introduce a reactance in the line. This translates to higher power transfer capability of the line since ony real power is transmitted and higher capacity utilization of the generators. For radial systems, like distribution systems, voltage drop is also reduced.

2. Resistance
DC system has lower line resistance than AC systems thus, lower line losses. AC system has a so called “skin effect” due to its 60 Hz frequency which introduces higher resistance in the line.

3. Power
In DC system, the power is just the real component. It means that the system operator need not to worry the sufficiency of reactive power to maintain the security and stability of the system. Also, as discussed earlier, the absence of reactive power translates to higher real power transfer capacity of the line and higher capacity utilization of the generators.
4. Frequency
In DC system, the frequency is zero, thus no frequency variation to monitor. Also, connection will not require synchronization and transient stability during fault clearing and switching is not anymore a concern. And more importantly, electromagnetic “radiation” and interference are not anymore a concern.
3. Susceptance
DC system does not introduce susceptance in the line thus removing the effect of charging current and over voltages in the system. This also translates to higher power transfer capacity of the line specially for underground and submarine cables.
4. Analysis
Analysis of AC system always involved complex numbers, while DC is only a real number, thus simplifying the analysis.

Only if DC system can transform voltage into various levels more efficiently than AC system, DC transmission system will the better choice.
Currently, the transformation of DC voltage into another level involves 3 steps;
1. AC to DC Rectification
2. AC to AC transformation, and
3. DC to AC Conversion

Unfortunately, these steps incur additional heavy losses. However, modern technology converter/inverter has attempted to reduce the amount of this losses. A 1000 MW, 230 KV AC - 450 KV DC/ 450 KV DC - 230 kV AC converter/inverter, for example, has a combine power loss of only around 1.6 %.

The use of DC system in the transmission of power will be more economical if the price from its benefits is higher than the cost incurred from the addition of extra equipments - rectifier and converter.