Demand response: Managing energy peaks

160 kWh peak shaving
Channel Lumber

For today's commercial facilities, kW consumption is just as important as kWh. Therefore, reducing kW demand is critical to driving bill savings for commercial facilities. With the cost of advanced energy storage declining significantly, the investment case for addressing demand charges with solar plus storage can be made today.

Unlike residential customers, larger electricity consumers must pay additional demand charges on a kW (power) basis in addition to their kWh (energy) consumption. To calculate the demand charge of a facility, the utility notates the highest average 15 minute period during a billing cycle. This is a surcharge on top of standard kWh rates and often times is a substantial portion of the total bill.

Demand Charges
Maximum demand charges by utility territory (NREL, 2017)

So why is storage needed for demand charge management systems? In short, PV can only go so far. When an energy storage system senses a peak demand event, it discharges the stored energy at a rate capable of curbing the facilities overall demand to reduce peak charges.

Load Profile
Demand load profiles of the same business without PV or storage, with PV, and with PV + storage. (Geli 2017)

When screening potential demand charge management customers, one must have 15-minute interval data from the utility or an energy meter. Here's a list of screening guidelines for potential customers:

Solar + Storage Screeing Guidelines

Facility Peak Demand > 100 kW
Utility Demand Charge > $18 / kW
Solar System Size > 100kW / site
Ideal PV:Storage kW Ratio < 3:1
Facility Load Factor < 70% / month

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