Peak demand power: the most overlooked potential energy saving

Peak demand, or peak load, is the highest electrical power demand measured over a certain period of time. Energy providers measure the peak demand of their customers to allocate the right amount of energy in all parts of the grid. In most countries, utility companies apply penalties for exceeding the maximum amount of energy that is reserved for your company. Once you exceed this power level, your utility company will need to reserve more power (kW) for you and as a result you will be charged a supplemental fee. Additionally, charges apply for the level of the maximum power demand.

How to reduce peak demand costs

1. Peak shrinking

The easiest way to reduce peak demand is to simply increase energy efficiency altogether, and thereby lower the peaks as well. By investing in more efficient equipment you will reduce the base load of energy used. Preparing and researching these investments may take a while, but the results carry long term effects.

Examples of peak shrinking

  • Replacing a hydraulic injection moulding machine with a more efficient fully electric injection moulding machine.
  • Replacing an electric motor for a new one with a higher IE certification. This certification contains, amongst other matters, requirements concerning power demand.
  • Replacing fluorescent lighting with LED-panels.
  • Replacing outdated air pressure driven assets. Modern solutions often require significantly less power.

2. Peak shaving

Peak shaving, or often referred to as load shifting, is focused on distributing energy consumption more evenly, thereby lowering peaks. Try to avoid energy intensive machines running at the same time and see if some machines can be turned on a bit earlier or later than usual, or at lower operating speeds.

Examples of peak shaving

  • Adhering to a staggered break schedule of employees in order to spread the start-up times of machines when the break ends.
  • Tune down machines that are non-crucial when nearing max power level.
  • Test runs often demand high power levels. Perform machine test runs outside of production hours. 
  • During summer, cooling installations demand more energy because the outside temperature is higher. Decreasing power demand of other machines can mitigate the surplus in power demand of the cooling installations.

3. Contact utility provider for solution

The procedure for determining maximum power levels varies per utility provider. By reconciling with the utility provider, you can set the max power to a level optimized for your plant. A lower maximum power level decreases fixed costs but increases the risk of exceeding, a higher power level increases fixed costs and decreases the risk of exceeding. Hence, having insights in your peak power can be useful.

4. Stored energy as alternative source of electricity

By storing energy in a battery that is slowly charged (e.g. by solar panels) you can easily deal with peaks in your power demand. When detecting a coming peak, the alternative power supply kicks in, decreasing the power demand at the utility provider.

Future outlook

Utility companies are already working on more dynamic pricing models. One example is spot pricing. This concept reflects the energy prices according to demand and supply in the given moment, as opposed to conventional pricing that is already set for a longer period. 

How Sensorfact tackles peak demand

With our plug-and-play energy management system we help our customers to measure energy on machine level and to read data visualizations in their online dashboard. In this dashboard you can see peaks in power consumption and determine how to prevent these peaks. Soon, our software will be forecasting peaks based on the total power consumption as well. With this you can set custom alerts on peak power, so you can intervene to prevent exceeding your maximum power level. 

Interested in learning more about smart energy management? Download our white paper 5 Steps to Smart Energy Management.

Written by Annick Sprokkereef

Annick Sprokkereef

Marketing Assistant