Between 1884 and 1885, Hungarian engineers Zipernowsky, Bláthy and Déri from the Ganz company in Budapest created the efficient “ZBD” closed-core model, which were based on the design by Gaulard and Gibbs. (Gaulard and Gibbs designed just an open core model) They discovered that all former (coreless or open-core) devices were incapable of regulating voltage, and were therefore impracticable. Their joint patent described a transformer with no poles and comprised two versions of it, the “closed-core transformer” and the “shell-core transformer. In the closed-core transformer the iron core is a closed ring around which the two coils are arranged uniformly. In the shell type transformer, the copper induction cables are passed through the core. In both designs, the magnetic flux linking the primary and secondary coils travels (almost entirely) in the iron core, with no intentional path through air. The core consists of iron cables or plates. Based on this invention, it became possible to provide economical and cheap lighting for industry and households.” Zipernowsky, Bláthy and Déri discovered the mathematical formula of transformers: Vs/Vp = Ns/Np. With this formula, transformers became calculable and proportionable. Their patent application made the first use of the word “transformer”, a word that had been coined by Ottó Bláthy. George Westinghouse had bought both Gaulard and Gibbs’ and the “ZBD” patents in 1885. He entrusted William Stanley with the building of a ZBD-type transformer for commercial use. Stanley built the core from interlocking E-shaped iron plates. This design was first used commercially in 1886.

The concept that is the basis of modern transmission using inexpensive step up and step down transformers was first implemented by Westinghouse, Stanley and Franklin Leonard Pope in 1886 in Great Barrington, Massachusetts. There were still problems with efficient generators and high voltage transformers. At an AIEE meeting on May 16, 1888, Nikola Tesla delivered a lecture entitled A New System of Alternating Current Motors and Transformers, describing the equipment which allowed efficient generation and use of alternating currents. Westinghouse needed Telsa’s better step up transformer technology and bought patents for it along with the highly efficient and inexpensive polyphase design for AC generators and motors used today. The utter simplicity of polyphase generators and motors meant that besides their efficiency they could be manufactured cheaply, compactly and would required little attention to maintain. Simple economics would drive the expensive, balky and mechanically complex DC dynamos to their ultimate extinction. As it turned out, the deciding factor in the War of Currents was the availability of low cost step up and step down transformers that meant that all customers regardless of their specialized voltage requirements could be served at minimal cost of conversion. This “universal system” is today regarded as one of the most influential innovations for the use of electricity.

High voltage direct current transmission
The case for alternating current was not clear at the turn of the century and high voltage direct current transmission systems were successfully installed without the benefit of transformers. Rene Thury who had spent six months at Edison’s Menlo park facility understood his problem with transmission and was convinced that moving electricity over great distances was possible using direct current. He was familiar with the work of Marcel Deprez, who did early work on high voltage transmission after being inspired by the capability of arc light generators to support lights over great distances. Deprez avoided avoiding transformers by placing generators and loads in series as arc light systems of Charles F. Brush did. Thury developed this idea into the first commercial system for high-voltage DC transmission. Like Brush’s dynamos, current is kept constant, and when increasing load demands more pressure, voltage is increased. The Thury System was successfully used on several DC transmission projects from Hydro generators. The first in 1885 was a low voltage system in Bözingen , and the first high voltage system went into service in 1889 in Genoa, Italy by the Acquedotto de Ferrari-Galliera company. This system transmitted 630 kW at 14 kV DC over a circuit 120 km long. The largest Thury System was the Lyon Moutiers project that was 230 km in length, eventually delivering 20 Megawatts, at 125kV.

Victory for AC
Ultimately, the versatility of the Thury system was hampered the fragility of series distribution, and the lack of a reliable DC conversion technology that would not show up until the 1940s with improvements in mercury arc valves. The AC “universal system” won by force of numbers, proliferating systems with transformers both to couple generators to high-voltage transmission lines, and to connect transmission to local distribution circuits. By a suitable choice of utility frequency, both lighting and motor loads could be served. Rotary converters and later mercury-arc valves and other rectifier equipment allowed DC load to be served by local conversion where needed. Even generating stations and loads using different frequencies could also be interconnected using rotary converters. By using common generating plants for every type of load, important economies of scale were achieved, lower overall capital investment was required, load factor on each plant was increased allowing for higher efficiency, allowing for a lower cost of energy to the consumer and increased overall use of electric power.

By allowing multiple generating plants to be interconnected over a wide area, electricity production cost was reduced. The most efficient available plants could be used to supply the varying loads during the day. Reliability was improved and capital investment cost was reduced, since stand-by generating capacity could be shared over many more customers and a wider geographic area. Remote and low-cost sources of energy, such as hydroelectric power or mine-mouth coal, could be exploited to lower energy production cost.

The first transmission of three-phase alternating current using high voltage took place in 1891 during the international electricity exhibition in Frankfurt. A 25 kV transmission line, approximately 175 kilometers long, connected Lauffen on the Neckar and Frankfurt.

Initially transmission lines were supported by porcelain pin-and-sleeve insulators similar to those used for telegraphs and telephone lines. However, these had a practical limit of 40 kV. In 1907, the invention of the disc insulator by Harold W. Buck of the Niagara Falls Power Corporation and Edward M. Hewlett of General Electric allowed practical insulators of any length to be constructed for higher voltages. The first large scale hydroelectric generators in the USA were installed at Niagara Falls and provided electricity to Buffalo, New York via power transmission lines. A statue of Tesla stands at Niagara Falls today in tribute to his contributions.