How Peak Shaving Can Reduce Operating Costs | EnergyLink
Close this search box.

How Peak Shaving Can Reduce Operating Costs

office with peak shaving efforts

As we head into fall, it’s more important than ever to assess energy usage within companies and identify ways to reduce operating costs. Although a fairly well known concept, peak shaving has become far more sophisticated in recent years, making it easier to implement and benefit from.

What is Peak Shaving?

Peak shaving describes the act of strategically using energy to save money by reducing a building’s maximum hourly power requirement.

Utility companies calculate the maximum hourly power requirement needed to maintain a constant supply of electricity over a singular billing cycle; they then multiple the kilowatt level by a specific rate to determine how much the company is charged. This is known as a demand charge and it ensures the building is constantly supplied with enough energy at all times.

Peak demand refers to the hours of operation the grid is under the highest levels of usage. High charges often come from just one short period of peak usage in a billing cycle. By identifying the equipment responsible for demand in a building, companies can redefine their usage to mitigate excessive charges while maintaining a comfortable environment in the building.

Why Is Peak Shaving Important?

Peak shaving is important because it reduces your demand charges. A great way to manage energy usage is to turn on machines everyday at at the different times. The reason for this is it reduces the maximum power drawn at any one time. Remember, utility companies charge for the maximum power requirement, no matter how little time that level of power is being used. Demand charges can make up a significant portion of a utility bill so it’s worth shaving the peak by staggering machine start up times.

How To Manage Peak Shaving

Peak shaving is extremely easy to do on a daily basis and can be made even easier with control systems. For example, if it’s going to be a very hot day with high humidity, the operating schedule can be changed around the weather forecast to cool the building earlier in the day. By doing this, high demand charges are mitigated as the amount of electricity needed later is reduced. This can reduce charges by as much as $8/kW.

Control systems also allow real-time data to be interpreted quickly, allowing adjustments to be made that reduce a building’s peak load. Controls can monitor any equipment in a building that requires energy, making it really easy to lower demand charges.

The Bottom Line

By introducing peak shaving measures to a company, costs can be drastically reduced with little disruption to routine. The key is to figuring out where energy is being used the most and how to minimize large power draws throughout the day. With effective energy management, your company could start saving money today with peak shaving.

Sign up for bi-weekly energy news updates

Get the latest energy news

Fill out the form below and and we’ll send you the energy news updates every two weeks.