Main Benefits of Using Energy Storage for Demand Charge Management
1. Reduced Demand Charges: Energy storage, primarily through batteries, can significantly decrease demand charges by leveling peak power usage. This is achieved by charging batteries during low-demand periods and discharging them during peak demand times, effectively smoothing out power consumption profiles. For example, lithium-ion batteries are particularly effective due to their high power-to-energy ratios, enabling substantial demand charge reductions in commercial and industrial settings.
2. Cost Savings: By reducing peak demand, businesses can save significantly on utility bills. Demand charges often represent a substantial portion of the total bill for large electricity consumers, such as commercial and industrial facilities. Energy storage systems can yield payback periods under five years when used for demand charge management in markets with high demand charges.
3. Operational Flexibility: Unlike load shifting, which changes business operations to reduce demand, “peak shaving” with energy storage allows businesses to reduce their demand charges without disrupting operations. This is because energy is discharged only when peak thresholds are exceeded, ensuring that business activities continue uninterrupted.
4. Optimization with Solar Power: Energy storage complements solar power by reducing peak load spikes that solar alone cannot mitigate. This combination of solar plus storage can offer greater savings by reducing both energy consumption and demand charges effectively.
5. Enhanced Electrical Infrastructure Efficiency: While energy storage primarily benefits individual facilities by reducing demand charges, it can also contribute to a more efficient use of the electrical grid infrastructure by flattening load profiles and reducing the need for peak capacity investments. However, this collective benefit may be limited at the aggregate level unless widespread adoption occurs.
Overall, energy storage is a strategic tool for managing demand charges, offering significant financial and operational advantages, especially when integrated with solar power and advanced energy management systems.
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