Producers consumers balance in the grid
Grid frequency is where the magic hides....

There is energy storage in the inertia of all that spinning steel, and more the other side of those throttle valves in the PE of hot water trying to be steam. 

The grid frequency is really the integral of the difference between generation and load divided by the total mass moment of inertia in the system. 

$$\omega=\int{(Generation - Demand) dt}/k$$

You set the base load generators to go to full output if the frequency drops below say 50.5Hz, the mid cost stuff to go throttle up at 50Hz and the peaking plants (Expensive to run) to load up if the frequency drops below say 49.8Hz (There are way more graduations then this).

The effect is that the base load runs at full power, the mid cost stuff tracks the demand and the peaking plants idle until the mid cost stuff fails to meet demand at which point they load up. 

Reactive power flow controls the system voltage and by controlling this you can control the load currents in the transmission network.

The dynamics are actually quite interesting especially during fault conditions and there are whole books written on that subject.