30 Minutes One Day of the Year Could Save Thousands of Dollars
Tea Kettles and Power Blackouts
In England, come the season premier of Downton Abbey, an extra power plant might be needed to avoid a power blackout. There’s often a patterned rush to the electric tea kettles during the first commercial break of popular TV shows that places considerable strain on the power grid. Moments like this are costly not only for tea-drinkers, but every power consumer attached to the grid.
During the hottest days in August or coldest days in December, similar preventative infrastructure is needed. To keep a building cool in July, air conditioners will run constantly, but this comfort comes with a high cost. For a small business owner, the cost of using power during these high demand times is several magnitudes more expensive than usual. EnergyLink aims to keep your customers cool while also contributing to significant savings.
30-minutes in One Day Could Cost Thousands Each Month
Each utility provider is unique in their rate structures, but for most, there is a single 15 or 30-minute period in each month in which more power is consumed than at any other time. Because business owners are charged on a different rate structure than households, this peak time sets the rate used to calculate the final bill.
The single highest 15 or 30-minute period of power usage sets the rate a business will pay for power for the month. In addition, most utility providers will impose a minimum billing amount year-round based on the highest 15 or 30-minute demand period set in any given year, which your utility’s billing rate structure refers to as the ratchet.
This ratchet, or usage charge for the single 15 or 30-minute period may exceed 50 percent of the cost for a single electricity bill. To put it another way, of all the power used in a single month, one 15 or 30-minute span may be 50 percent of your monthly bill.
This is because the power grid during peak demand times is like taking a toll road during rush hour. Since some buildings use far more power than others, like an office building compared to a diner, the infrastructure must be built to meet the needs of the greatest power user at peak demand times, just like a toll-road is built to accommodate excess traffic during rush hour. Since specific infrastructure must be built to accommodate the peak period, the cost charged for this peak period goes to paying the overhead costs of the utility company, such as the cost of building an extra substation next to the new, power-hungry grocery store.
Kilowatts and Kilowatt Hours Defined
For business owners, the power bill lists both kW, or kilowatts, and kWh, kilowatt hours. This is slightly different than the bill for a household, which lists only kilowatt hours, because the number of kilowatts used is much less in a home than in a business. In homes, kilowatt consumption is relatively normalized, and so the homeowner is charged only for how long the lights were left on, and the overhead costs of the electric-grid, the kW costs, are built into the bill.
Kilowatts are what’s known as “power’, or maximum power demanded at a given time. A factory powering a number of machines at a certain time requires a large number of kilowatts. Kilowatt hours are called “energy” and are directly related to how long the lights were left on, or how long a factory’s machines ran.
To tie the difference between kilowatts and kilowatt hours into the rush hour example, this is like the difference between having 1,000 cars travelling through a toll booth in one minute, versus having 1,000 cars travel through the booth throughout an hour. 1,000 cars in a minute would require many more booths to remain viable than would 1,000 cars spread out in the span of an hour.
Utilities have determined that it’s most equitable to charge those who create the extra kilowatt demand for the surplus infrastructure charges, which is why the cost of an extra substation is spread across all business owners.
How ADMS Minimizes Peak Dower Demand Charges
Peak power proposes a problem for utility providers and business owners alike. Peak power times, or rush hour for electricity, is somewhat predictable but uncontrollable and correlates with sun exposure, temperature, and collective individual activity. Peak power impacts the electrical grid as a whole, like during instances as specific as a power blackout during the Super Bowl, and also impacts the cost you end up paying each month, due to your HVAC running in the afternoon, when power is most expensive since buildings have collectively heated up throughout the day and then require cooling.
If each building with a high power draw were able to manage its own peak power, the grid would be less stressed as a whole, potentially requiring less infrastructure, thus lowering power costs for businesses. If peak power were simply avoided altogether, costs would drop precipitously.
EnergyLink’s ADMS, Advanced Demand Management System, ensures that you can heat and cool your building sustainably and efficiently, yet pay far less at the end of the month. ADMS, a smart, proprietary software combined with solar power for maximum gains, knows when your building’s peak power will happen, and avoids the situation entirely. The energy consuming systems in your small business are controlled by ADMS in such a way that lower your building’s peak power demanded, while still allowing the systems to run as effectively as normal.
Peak power demand costs can run as much as 50 percent of a business’s electric bill. Through using ADMS combined with solar energy, this spike can be nearly flattened out, and your building’s overall daily and monthly power curve shaved down to a manageable level.