Battery Energy Storage Systems (BESS) reduce peak energy costs through strategic energy management and demand charge mitigation, leveraging intelligent software to optimize electricity usage. Here’s how they achieve this:
1. Load Shifting and Peak Shaving
- Storing Off-Peak Energy: BESS charges during low-demand periods (when electricity prices are lower) and discharges stored energy during peak hours to avoid high on-peak rates.
- Demand Charge Reduction: By flattening consumption spikes, BESS reduces “demand charges”—fees based on the highest 15-30 minutes of power usage in a billing cycle.
- Integration with Renewables: Systems like AmpiFARM store excess solar or wind energy during generation peaks and release it during high-demand periods, minimizing grid reliance.
2. Grid Interaction and Cost Optimization
- Fast Response to Price Signals: Intelligent software automatically switches between grid power and stored energy based on real-time pricing, ensuring the cheapest source is used.
- Exporting Excess Energy: In some programs, stored energy can be sold back to the grid during peak price intervals, generating revenue.
- Avoiding Infrastructure Costs: By reducing peak grid demand, BESS delays costly grid upgrades for utilities, indirectly lowering long-term consumer costs.
3. Commercial and Industrial Applications
- High Cost Savings: For industries with steep demand charges (e.g., factories, hospitals), BESS can reduce energy costs by up to 80% by optimizing self-consumption and peak shaving.
- Resilience and Backup: Critical infrastructure uses BESS to avoid downtime costs during outages, while still participating in demand-response programs.
4. Policy-Driven Incentives
- Performance-Based Payments: States incentivize BESS owners to discharge during grid-wide peak periods through virtual power plants or utility-administered programs.
- Hybrid Systems: Pairing BESS with renewables maximizes returns through tax credits, reduced grid dependency, and participation in green energy markets.
By combining real-time energy management, renewable integration, and policy alignment, BESS significantly lowers peak energy expenses for both end-users and grid operators.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-battery-energy-storage-systems-contribute-to-reducing-peak-energy-costs/
