Peak shaving is a strategy that specifically reduces energy costs for businesses by minimizing their peak electricity demand. Here’s how it works and how it helps:
How Peak Shaving Works
Peak shaving involves reducing power consumption during periods of high demand. This can be achieved through various methods, including:
- On-site Generation: Businesses can use alternative power sources like solar panels or natural gas generators to reduce their dependency on the grid during peak times.
- Battery Energy Storage Systems (BESS): Energy is stored in batteries during off-peak hours when electricity is cheaper and then used during peak times to reduce grid demand.
- Load Curtailment: Non-essential energy consumption is reduced during peak periods by temporarily shutting down or adjusting non-critical equipment.
Reducing Energy Costs
Peak shaving reduces energy costs in two key ways:
- Demand Charges Reduction:
- Basis of Cost: Electricity bills for businesses often include demand charges based on the highest power consumption rate during any interval (typically 15 minutes) within a billing period.
- Effect of Peak Shaving: By shaving off these peaks, businesses can lower their demand charges, which significantly impacts their utility bills.
- Averting High-Cost Periods:
- Variable Pricing: Electricity is often more expensive during peak hours, which can significantly increase energy costs.
- Peak Shaving Benefit: Using stored or locally generated power during these periods avoids the higher costs associated with peak demand.
Example of Cost Savings
For example, if a business with high-power electric vehicle charging stations uses peak shaving, it can avoid high demand charges by discharging stored energy during peak charging times. This strategy can save businesses thousands of euros by preventing occasional high peaks in demand that would otherwise set their bill for the entire period.
Overall, peak shaving helps businesses save money by reducing both the demand charges and the amount of electricity bought during high-cost periods.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-peak-shaving-specifically-reduce-energy-costs-for-businesses/
