Peak demand refers to the maximum level of energy consumption that a consumer extracts from the electrical grid within a specified timeframe. Understanding this load is crucial for effective commercial energy management strategies since it is utilized to calculate a portion of the energy bill for a building. Several electric utilities impose charges on customers based not only on their energy consumption but also on their peak load.
Peak Demand Example
Here are some examples of peak demand-
- Seasonal: In North Carolina, it is observed during the winter months.
- Daily: It occurs during a hot afternoon when all rooftop cooling units are operating at maximum capacity, and all equipment in the building has been restarted after lunch. During this period, energy usage spikes to about five times the average consumption, resulting in a demand charge.
- Annual: It typically happens in the summer during prolonged heat waves, usually between 5 pm and 9 pm. This is when people return home and start using their air conditioners, TVs, lights, and other household appliances, causing a surge in electricity consumption.
Why is Peak Demand Important?
It is important because of-
1. Capacity Planning: It is based on the understanding of peak demand, allowing utilities and grid operators to accurately anticipate and forecast electricity consumption. This helps them determine the necessary capacity of power plants to ensure the reliable and uninterrupted functioning of the grid.
2. Utility Billing: It is also determined by customers’ peak demand. The highest demand recorded during a month or even a short period of 15 to 30 minutes can result in a demand charge, which can significantly impact a customer’s utility bill. Therefore, understanding and effectively managing this demand can help customers reduce their electricity bills and save money.
Also Read: What is Demand Charge?
