Think Peak!
What is peak power, and how can we reduce it? Peak power is the amount of energy customers consume during peak usage periods. We can reduce peak power by using alternate energy sources, like natural gas from storage, wind, or solar power, as supplements during these periods.
Ginni Stieva, of Industrial Equipment News, explains how peak shaving can control energy demands and cut costs. All businesses are charged for energy consumption based on the kWh they use during a billing period, but commercial and industrial customers are hit with extra costs as well. These companies are billed for a “capacity charge,” which is based on the costumer’s highest level of energy use. While this fee helps pay for the infrastructure that is necessary to deliver the peak demand level of energy, it can also account for 25% of the company’s utility costs.
Capacity charges calculated based on several factors, including:
- peak demand during the previous month
- average usage over a set period of months
- seasonal variations
- time-of-day variations
- ratchet charges
There are methods, however, that can be used to decrease these charges. By using economical means of reducing just a small amount of demand during key periods of a 24-hour cycle, communities can greatly reduce demand costs on their power bills. Using supplemental sources prevents pipelines from having to expand their delivery facilities just to accommodate short periods of extremely high demand. An animation from the California Energy Commission illustrates the process in detail.
To institute peak shaving, it is necessary to both reduce and increase. Reducing personal and commercial consumption just a little during peak periods allows for a reduction in the amount of coal, oil and nuclear fuel used to produce power. The increase comes from utilizing localized power production from wind and solar sources during peak periods. Also, when demand information is available, a company can take action to reduce the demand from the utility before the threshold is reached.
Common methods of peak shaving being used by energy consumers include load scheduling, using onsite generation and load shedding. Energy accounts for a large amount of a company’s operations costs. It is important to keep up with peak shaving practices and other sources of energy that can be used to lower costs.
Author: Phillip Smeall, Process Improvement Specialist
