What is Peak Demand Management? | EnergyLink
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What is Peak Demand Management?


Peak demand is the highest average demand during all of the intervals in a billing cycle measured by power utilities, according to Fluke. It is when the electric grid experiences its highest demand in a year, and it normally occurs in the summer. Peak demand management is one of the best ways to help you uncover hidden costs, protect equipment from damaging conditions and reduce unscheduled downtime. Your building’s infrastructure needs to be large enough to supply power at peak levels, so it is important to understand peak demand management.

How to Calculate Peak Demand?

According to Fluke, there are three steps to calculate peak demand:

  1. Determine which demand intervals the utility uses (15 minutes is most common)
  2. Measure demand over time
  3. Look for significant load operating concurrently and use demand measurement to verify readings for the individual loads

With this, facility managers can calculate the peak demand of their facilities by themselves.

How to Lower Peak Demand?

Once you understand your peak demand, you can try to reduce it and save money. Due to the complexity of energy pricing, two different buildings can use the exact same amount of energy but have two totally different utility bills. This is because infrastructure maintainers have to design the buildings based on the peak demand. The higher the peak demand, the more complex the infrastructure has to be in order to meet the need. If facilities are able to shift the loads of energy during the peak period, energy charges can be significant reduced.

According to Energy Manager Today, there are 4 main ways to reduce peak demand:

  1. Peak Distribution: the most common contributor to high peak demand is multiple energy intensive processes running at the same time. The solution to this problem is to simply schedule these systems to run at off peak hours, so they never run at the same time. To do this, facility managers can use building automation system, or through onboard controls.
  2. Peak Shrinking: using more efficient equipment is another way to reduce peak demand. Simply replacing outdated equipment with new, more efficient equipment can save a large amount of energy.
  3. Peak Shaving–Storage: this strategy needs to be implemented with energy storage. Instead of relying on one energy source, facility managers can install batteries. During peak demand hours, your facility can draw energy from the batteries to reduce peak demand. Depending on the financing methods used, this could be a costly option; however, if the facility already has a photovoltaic solar array or a power factor correction strategy, it would be a more efficient plan
  4. Peak Shaving–Alternative Energy: last but not least, another way to reduce peak demand is to rely on renewable energy, like solar energy. Installing a new energy system is expensive, but it can be considered as a long-term investment because renewable energy can save a lot of money after a certain period of time.

One peak demand reduction plan does not apply to all business. Most of the time, facility managers will choose to combine two plans or more in order to save more money. Real-time monitoring of equipment can help you identify a peak demand issue before it shows up on your utility bill. And the earlier you find out, the more money you are able to save.

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