Peak shaving is an effective energy management strategy that helps reduce demand charges by decreasing the peak power usage from the electrical grid. Here’s how it works and its benefits in reducing demand charges:
How Peak Shaving Works
- Reduction in Peak Power Consumption: Peak shaving involves reducing electricity consumption during peak demand periods. This can be achieved by using alternative energy sources such as battery energy storage systems (BESS), which store energy during off-peak hours and discharge it during peak hours.
- Use of Alternative Power Sources: Businesses can switch to local power sources like solar, wind, or even fuel cells during peak times to reduce reliance on the grid.
- Demand-Side vs. Supply-Side Management: Peak shaving can be implemented through demand-side management (reducing demand) or supply-side management (using alternative supply sources).
Benefits in Reducing Demand Charges
- Lower Demand Charges: Demand charges are a major component of commercial and industrial electricity bills, based on the highest power consumption rate during a specific interval, typically 15 minutes. Peak shaving helps lower these charges by reducing peak usage.
- Cost Savings: By using stored energy during peak hours when electricity prices are high, businesses can significantly reduce their electricity costs.
- Grid Stability: Peak shaving contributes to grid stability by balancing electricity demand and supply, preventing sudden spikes that strain the grid infrastructure.
- Flexibility and Resilience: Businesses with inflexible loads can maintain operations without interruptions while avoiding high demand charges.
In summary, peak shaving effectively reduces demand charges by strategically reducing power consumption during peak periods, using alternative energy sources, and optimizing energy storage to avoid high rates during peak times.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-peak-shaving-help-in-reducing-demand-charges/
