Reducing Your Peak Demand Costs

Peak demand charges can really cost you on your energy bills. Learn more about peak demand and what you can do to reduce your costs.

Why do I have peak demand charges?

This curve represents demand for electricity. At the top is the highest level of demand in a single day. But, your facility is one of many, most of which have a similar demand curve.

When most facilities use power, they don't use it continuously at the same rate. It's more of a curve, with more power used during a 4- to 6-hour span. But why does that matter?

Image this meter is measure how much power a plant has to generate. Because power must made as it used, there has to be enough capacity to account for the highest demand. That means more cost to operate and maintain additional power plants. Those additional power plants are what peak demand charges are paying for. Customers with the largest demand on the grid are paying to ensure that there's enough power available when they need it.

How can I reduce peak demand?

Peak demand can be decreased by using energy-efficiency measures, such as switching to LED lighting, using more efficient motors or improving cooling system efficiency.

Another effective measure for reducing peak demand is to shift when you use power. For instance, you can charge batteries at night to handle some the large electric loads that must operate during peak hours. You can even alter work schedules so that some people start earlier and some start later, spreading out tasks and power usage over time.

With some smart planning and proper equipment, you can turn your mountain of peak demand into more management hills.