Peak Shaving and Load Shifting
Peak shaving and load shifting are two distinct strategies used to manage energy consumption, each providing different pathways to cost savings:
Peak Shaving
Objective: Peak shaving focuses on reducing the maximum energy demand during peak times, typically by using alternative energy sources such as on-site generators, solar panels, or energy storage systems like batteries.
Cost Savings:
- Demand Charges Reduction: By lowering peak demand, businesses can significantly reduce demand charges, which are often based on the highest energy usage during a billing period.
- Grid Stability: Enhancing grid stability can lead to further savings by avoiding grid overload conditions that might necessitate costly interventions.
- Reduced Delivery Charges: Lowering peak demand reduces utility delivery charges, which can be substantial in commercial settings.
Load Shifting
Objective: Load shifting involves moving energy consumption from peak hours to off-peak hours when demand is lower, thereby smoothing out the demand curve.
Cost Savings:
- Time of Use (TOU) Pricing: By shifting energy use to periods with lower electricity prices, businesses can capitalize on cheaper rates.
- Reduced Peak Demand Charges Indirectly: While load shifting doesn’t directly reduce peak demand, it can prevent hitting the peak thresholds if done properly.
- Even Demand Distribution: Smoothing energy demand helps avoid grid overloads and supports the use of renewable energy sources during off-peak hours.
Comparison
- Peak Shaving offers direct savings by reducing maximum demand charges and improving grid stability.
- Load Shifting provides cost savings through optimized energy pricing (TOU) and potentially reduces peak demand indirectly by redistributing energy use.
In scenarios where high demand charges are a significant concern and operational flexibility is limited, peak shaving may yield more direct cost savings. Conversely, businesses with flexible operations can benefit from load shifting by taking advantage of lower off-peak rates.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-peak-shaving-differ-from-load-shifting-in-terms-of-cost-savings/
