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Peak Load Management Strategies

When tackling energy management, it is not only imperative to focus on how much energy is used, but also when it is being used, as this can affect your peak load contribution.  Electricity grid consumers are billed for both the energy they consume (kWh) and the amount of energy that the utility must provide to reach their peak load (kW demand).  These peak demand charges can represent over 30% of the total electricity bill.  Individual peak loads are determined when strain on the electric grid is at its highest, meaning that it is important to develop a peak load management plan.  Read on to learn more about peak load contributions and strategies to manage yours.

What is peak load management and how does it affect my costs?

Your peak load contribution (PLC), or installed capacity tag (ICAP tag) is generally determined by your company’s contribution to the grid’s overall peak load.  It is calculated depending on how much electricity you demand when the grid is peaking.  They are then used by utilities as indicators for how much generation they will need to keep up with demand and prevent shortages.  Since you are billed for both the amount of energy you consume AND the amount of energy that needs to be available to meet your account’s demand, keeping your PLC/ICAP managed is vital to limit higher electricity bills.  For more information on how peak load is calculated specific to territories, read the Peak Load Management Primer.

Peak load management strategies:

Implementing a peak load management plan is the first step to kick-start electricity bill savings.  Peak load management strategies range from low-cost operational methods to capital-intensive investments.  Certain industries, such as manufacturing, typically result in higher peak loads due to their energy-intensive equipment and operations.  Depending on the unique circumstances of your facility, finding the right peak load management plan will vary.

Low-cost operational strategies:

  • Starting up building’s systems earlier or before peak hours – this will also give the building more time to reach the desired temperature, thus thinning out the energy use
  • Generating a startup schedule, staggering the turning on of equipment
  • Tweaking operational times of energy-intensive equipment (scheduling so that not all machines run at once)
  • Turning up the thermostat for blocks of the day and using fans (shading sunlight in large windows to minimize radiated outdoor heat)
  • Pre-cooling the building – running the building’s air conditioning overnight (when demand is low) so it does not require as much energy to maintain temperature the following day
  • Making sure lights are turned off when not in use (or installing dimmers)
  • Building owners should promote tenant energy demand responsibilities – the use of power strips, timers for electricity, installing LED light bulbs

Capital-Intensive Investments:

  • Energy storage systems:
    • Battery storage – The battery charges while the grid is at its base load, or minimum level of demand, and electricity prices are low. Then, this charged power is used by the building during peak hours to decrease their load.
    • Thermal (ice) storage – This technology generates ice overnight, again when the grid is at its base load, to then be used during the day for cooling of the building.
  • Adding capacity via on-site generation – The generation of your own electricity through renewable energy sources, such as solar, hydro, etc. to limit your reliance on the grid.
  • Motor controllers or Variable Frequency Drives – This will adjust the motor driven equipment’s (such as an escalator) output and speed to meet the exact demand. It recognizes opportunities for the motor to run at less than 100% power.

Ultimately, to manage your peak load contribution effectively and efficiently, you need to know what the utilities don’t tell you – when the peak load hours are going to occur.  With a predictive analytics platform, like Watchwire, you can be alerted when peak load hours are likely to occur through day-ahead and day-of emails.  Then you’ll be prepared to act out your peak load management strategies and reduce your load while saving your company money.

To ensure your efforts are successful, EnergyWatch can measure and verify your peak load reducing capital improvements and operational strategies. EnergyWatch will:

  • track all the invoice and metering information real-time to uncover any inconsistencies
  • act as a neutral third party
  • Comply with guidelines outlined in the International Performance Measurement and Verification Protocol (IPMVP), the national measurement and verification standard in the United States and many other countries
  • Provide oversight from an AEE Certified Measurement & Verification Professional.