As a new resource, electricity was in competition with gas for lighting, but it never achieved any dominance before the First World War. It was more adaptable and successful as a source of power and in the form of hydroelectricity relaxed a major energy constraint in countries like Sweden, Norway, Spain and Italy, namely their dependency on coal supplies. Initially, the networks were limited spatially, so the economic organisation of electricity had many of the features found in gas supply, and local government was critically involved. There were differences and they arose firstly from the strong role played by manufacturers of electrical equipment like turbines, generators and tramcars. Such companies produced large quantities of electricity for their own usage and were often closely involved in contracts with town councils for electricity supply and tramways. In Germany, for example, ‘big manufacturing industry’ preferred to generate its own supplies, and it was not until the 1920s, with the development of transmission grids, that utility supplies of electricity came to exceed industry's own production of electricity. A second feature was the desire of both local and central government for tighter regulation of fares, tariffs, rates, supply conditions and environmental effects, experienced as many of them were from dealings with the railways, gas and water companies.

Electricity supplies started in the 1870s but the main initial spurt came in the 1880s and 1890s. Most undertakings that were selling electricity were vertically integrated concerns engaged in generation, transmission and distribution.