An Introduction to Peak Shaving

In many areas of the country, the majority of residents and businesses need power at exactly the same time. This causes an increase in demand for utility power, which it may not be able to meet (causing a brownout). If the utility is able to meet the peak demand, it may charge more for power during this time.

Short periods of increased prices may not affect homeowners, who are using small amounts of energy individually. However, higher energy costs will affect large consumers, such as manufacturers. To combat these costs, businesses may opt to participate in load leveling, or “reducing large fluctuations in customer demand” for power. Peak shaving is one type of load leveling.

What is peak shaving?

Peak shaving reduces the quantity of power purchased by a facility during hours of peak demand. This does not necessarily mean the facility is reducing power consumption, although that is one peak shaving technique. Reducing the amount of power purchased from the utility during the most expensive times to do so saves the facility money over time. It also keeps the facility from consuming more utility power than agreed upon by the company and the utility. When businesses install peak shaving capabilities in their facilities, it keeps the power demanded from the utility more stable over time. Therefore, the utility doesn’t need to expand to meet peak demand, because their large customers are doing it for them.

There are multiple techniques for peak shaving. Some of the most common solutions include generators and battery-stored renewable energy.

Peak Shaving Generators

One solution to reducing energy needs during times of peak consumption is onsite generators. While there is an upfront cost associated with installing generators capable of powering an entire facility, those costs may be offset by savings with the utility. Gensets in use during peak shaving must be EPA-compliant because of the non-emergency nature of the situation.

To plan for peak shaving generators, facilities will need to enlist support from the utility, electricians and engineers. Using generators in this strategic way can be more complicated than using them strictly for backup power.

Peak Shaving Energy Storage

Instead of onsite power generation strictly during times of peak consumption, this technique is constantly generating and storing power. This is typically done with renewable wind or solar energy stored in batteries. During times when utility power is more expensive, facilities rely on the stored energy.

Reducing Consumption

Rather than offsetting reduced utility power with onsite generation, facilities may opt to use less energy to level the load. Reducing consumption could mean adjusting production schedules, turning off machines or improving building efficiencies.