What does 'Interconnection' refer to in power systems?

'Interconnection' in power systems primarily refers to the linking of transmission networks to facilitate the transfer of electricity between different regions or utilities. This interconnectedness is essential for ensuring reliability and efficiency in the grid. By connecting transmission networks, electricity can flow from areas of surplus generation to areas of deficit, thus optimizing resource utilization and enhancing grid stability.

Interconnection plays a critical role in balancing supply and demand, providing access to a larger pool of resources, and improving the overall resilience of the grid against outages or disruptions. It also allows for the integration of renewable energy sources, as surplus energy generated in one region can be shared with others, thereby supporting sustainability goals.

The other options do not pertain to the technical and operational aspects of power systems regarding electricity transfer. Merging financial records, regulatory collaborations, and energy conservation initiatives, while important in their own contexts, do not encapsulate the concept of interconnection in the realm of power systems. Understanding this definition is crucial for evaluating how electricity is managed and delivered within and across power grids.