The AC described here is Alternating Current (you may also see AC being used to refer to air conditioning). In physics terms it refers to electric current where the flow of charge changes direction periodically (usually represented via a smooth sine-wave picture). As opposed to DC (Direct Current), where the flow of charge is always in the same direction.
From a business perspective, the key things to know are that AC is:
- what’s produced by generators which spin (which is all of them other than solar PV)
- what comes out of the socket in your wall
- what’s carried by most of the grid (transmission and distribution), other than some very long-distance, high-capacity lines and some undersea cables
Whereas DC is:
- what’s produced by a solar photovoltaic (PV) panel: an inverter then converts DC output to AC
- what’s used by modern electronics
- what’s input and output into a battery
- used for some high-capacity and long-distance grid connections, as energy losses along the line can be smaller
So in an electricity system, electric current can be changed multiple times from AC to DC and back (and each time, a little bit of energy is lost).
- A hydro plant in the Brazilian Amazon produces AC
- That’s converted to DC to be transported a few thousand km towards where people live
- It’s converted back to AC to connect into regular transmission and distribution lines and eventually into someone’s house
- It’s converted back to DC by that little box on the charging cable (the one that gets warm), to power their laptop