Peak shaving involves both reducing overall energy consumption during peak times and shifting that consumption to more cost-effective or sustainable energy sources. By strategically managing when and how you use energy, you can significantly cut down on energy costs, avoid demand charges, and contribute to a more stable energy grid.
During peak demand times, the cost of electricity often rises due to the increased strain on the power grid. Utilities charge higher rates during these periods to manage the higher operational costs, which can lead to expensive electricity bills for large consumers. Peak shaving involves adjusting your use of grid-supplied electricity when prices are highest, ensuring you avoid excessively high energy costs.
Load shifting involves moving energy-intensive processes to off-peak times when electricity demand and prices are lower. This can be done manually or automated through advanced energy management systems.
Installing on-site power generation systems, such as solar panels or backup generators, enables businesses to produce their own electricity during peak demand times, reducing reliance on the grid.
Implementing these techniques manually can be a complex process that requires careful planning and analysis of your energy usage patterns. However, with an end-to-end solution from Volstora it''s easy to achieve a peak shaving strategy.
Our revolutionary Volstora battery energy storage systems, combined with our proprietary energy management software DAV3, provide everything you need to minimize your company''s energy bills. Our systems go beyond helping you to monitor and manage your energy usage in real-time – they can also help you to optimize energy trading, selling surplus electricity to the grid for maximum profit.
Peak shaving, or load shedding, is a strategy for eliminating demand spikes by reducing electricity consumption through battery energy storage systems or other means. In this article, we explore what is peak shaving, how it works, its benefits, and intelligent battery energy storage systems.
Electricity is essential to modern life. It is not just a luxury we use to run our gadgets and enjoy our leisure time; rather, it is a vital resource we rely on to carry out our daily tasks, generate revenues for our businesses, and provide public security, safety, and health.
Flexibility and resilience in power distribution is becoming increasingly important to deal with the rising share of variable renewables brought on by decarbonization of the energy system, as well as the rising simultaneous load from power electronics, manufacturing facilities, heat pumps, and the charging of electric vehicles.
Battery Energy Storage Systems (BESS) are the primary candidate for dealing with electrical grid flexibility and resilience through applications such as peak shaving. Batteries are of particular interest at small and medium scales due to their relatively high energy density, lack of geographic restrictions, minimal noise, and low maintenance requirements.
Battery Energy Storage Systems play a pivotal role between renewable energy supplies and responding to electricity demand. Energy supplied from renewable sources, or the electrical grid, is available for instant consumption and many factors such as variance in solar arrays or electricity market demand significantly impact the cost of electricity.
Co-locating energy storage with demand, such as by placing it in factories and medical facilities, has several important advantages. These advantages include peak shaving of both import from the grid and export from embedded renewables. Battery Energy Storage Systems provide backup power, delay infrastructure reinforcements, improve power quality, and increase self-consumption of embedded renewables.
Also referred to as load shedding, peak shaving is a strategy for avoiding peak demand charges on the electrical grid by quickly reducing power consumption during intervals of high demand. Peak shaving can be accomplished by either switching off equipment or by utilizing energy storage such as on-site battery storage systems. The objective of peak shaving is to eliminate short-term spikes in demand and reduce overall cost associated with usage of electricity.
To understand the importance of peak shaving, it is necessary to examine how peak demand affects electricity prices. There are typically two components to an electric utility bill. Customers pay for electricity based on consumption, measured in kilowatt-hours (kWh) and demand, measured in kilowatts (kW). Demand charges usually apply to commercial and industrial customers, who tend to have higher peak loads than residential customers.
However, it should be noted that with the transition to electric mobility, the surge in the number of electric vehicles, and with the addition of residential fast charging infrastructures, demand charges could have a significant impact on residential electrical utility bills.
The contribution of demand charges varies geographically, but typically ranges from 30% to 70% of the customer''s electric utility bill. Thus, it is important to understand how demand charges work and how peak shaving through battery energy storage systems can minimize electricity charges without compromising the operation of any given application.
Demand charges likely make up a sizable amount of your electricity bill if you are a major business or an industrial utility user. The demand charge is a monthly fee that you must pay to cover the expense of maintaining the infrastructure needed by the electric company to supply energy to your building.
Demand charges are determined by peak power usage rather than total energy consumption and are intended to assist electric utilities in covering the cost of delivering electricity when utility clients, such as factories, employ an energy load above a specific threshold. The demand charge is calculated based on usage during a 15-minute peak interval throughout the billing cycle, multiplied by the demand fee. So, the higher the peak usage in kW, the higher the demand charge is going to be.
With a tiered billing structure, the user pays for electricity based on two or more rates for different usage amounts. When the user''s consumption passes a certain threshold, the rate at which they pay for electricity usage increases. The number of tiers and the thresholds for each tier differ based on geographical locations and utility companies.
With a time-of-use billing structure, the user pays for electricity based on two or more rates for different times of the day or days of the week. The utility will define intervals of on-peak and off-peak based on typical demand during that period. Utility companies can also utilize a combination of billing structures and incorporate seasonal rates as well.
The two charges that can significantly affect the rate at which industrial and commercial users pay for electricity include demand charges and consumption charges during on-peak intervals. As mentioned above, peak shaving is a strategy for mitigating demand charges and usage during peak times, thus it requires altering the operation of an application or implementing storage capabilities to store energy for later use.
Since shutting down or slowing productivity contradicts business goals and objectives, often businesses bare the cost of demand charges and on-peak charges, perhaps in part due to lack of knowledge about energy storage technologies.
A battery energy storage system is a method for storing electric charge using electrochemical storage units so that it can be utilized at a later time with the help of intelligent software that balance electricity supply and demand.
During this period, the batteries of the energy storage unit store electricity from the grid or embedded renewables. The intelligent software integrated within the energy storage system ensures that the batteries are charged during off-peak intervals or when excess energy is produced on-site through renewable sources such as solar.
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