Energy storage solutions, such as battery energy storage systems (BESS), significantly impact electricity costs during peak hours by employing strategies like peak shaving and time-of-use (TOU) optimization. Here’s how these strategies work:
Peak Shaving
- Reduction in Demand Charges: Commercial and industrial customers often face high demand charges based on their peak power consumption within a billing period. Using energy storage to decrease these peaks can dramatically lower demand charges.
- Inflexible Loads: For processes that cannot be delayed or shifted to off-peak times, peak shaving helps reduce grid demand during peak hours, ensuring continuous operation without significant cost increases.
Time-of-Use (TOU) Optimization
- Shifting Consumption: Energy storage systems charge during off-peak hours when electricity is cheaper and discharge during peak hours when prices are higher. This helps building operators maintain electricity supply while avoiding high peak-hour costs.
- Financial Savings: The potential savings are substantial, especially in regions with fluctuating electricity prices or high demand charges. The higher the demand charges, the greater the potential for cost savings.
Overall, energy storage solutions help reduce electricity costs during peak hours by minimizing peak demand charges and optimizing energy consumption based on time-of-use pricing structures.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-energy-storage-solutions-impact-electricity-costs-during-peak-hours/
