Red, EXCELLENT Question. Myself (retired electrical distribution design engineer) and other professionals as well as lay people have covered this great question MANY times here before so let me just try to summarize some information for you.
1) YES 3 conductors will suffice IFFFFF you only need 120 volt service at the shop. That would be a HOT, a Neutral, an Equipment Ground fed from a single pole 120 volt breaker at the main panel. Breaker sized to the wires ampacity i.e. 20 amp for 12 gauge or 30 amp for 10 gauge
2) NO 3 will NOT suffice if you want 240 at the shop. If you want 240 plus 120 then YOU NEED 4 CONDUCTORS. Two Hots (L1 & L2), Neutral, Equipment Ground. That will require a two pole 240 volt breaker at the main panel. Breaker sized to wires ampacity again.
3) YES all building electrical services require a Grounding Electrode. That may be one or more made electrodes such as driven into the earth copper ground rods and/or conductive water pipes SUBJECT TO LOCAL AUTHORITY REQUIREMENTS
4) SUBJECT TO LOCAL AUTHORITY you can use cable rated for direct earth burial (like Underground Feeder UF or Underground Service Entrance USE) or you can use cable or single conductors like THWN rated in buried PVC conduit provided its NOT under a driveway.
5) Sub panel at shop. YOU MUSTTTTTTTT KEEP NEUTRAL AND GROUND BUSSES SEPERATE AND ISOLATED !!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Unlike at a main panel where the two are bonded together THIS IS IMPORTANT AND FOR SAFETY AND IS A STRICT CODE REQUIREMENT assuming your local authority (if any exists) has adopted the latest NEC
6) Wire size: Sure 10 gauge is 30 amp rated but if the distance is great and if youre gonna have continuous loads of more then 24 amps YOU MAY WANT TO UPGRADE TO 8 GAUGE TO REDUCE VOLTAGE DROP
I gotta run but will check back later today if you have questions I did this in a hurry and its NOT complete but the basics for your safety and code compliance if that matters?? Maybe the other professional electricians and engineers and other fine knowledgeable gentlemen etc can add to this for what I missed being in such a hurry
John T Long retired EE and rusty on the latest code but believe this is all correct
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