• Peak shaving and load shifting are ways to reduce high electricity demand charges
• Peak shaving reduces the amount of consumption while load shifting moves the time of consumption
• Facilities can use a range of strategies and technologies to lower demand charges

Few things impact an industrial facility’s utility bill more than peak loads. These are periods of high energy usage when the grid is under strain. An example is during heatwaves and the influx of cooling in commercial and residential buildings spikes electricity consumption. To meet demand and avoid blackouts or brownouts, utilities often rely on fossil fuel peaker plants, which can fire up at a moment's notice. This causes electricity rates – and emissions – to soar. Managing energy consumption during these moments is one of many strategies to reduce energy costs.

For industrial facilities, this becomes especially problematic when the bulk of their energy usage is during peak load periods, resulting in costly demand charges. There are two options to avoid these costs while keeping operations intact: peak shaving and load shifting. While both energy management approaches reduce stress on the grid, they differ in their timing, approach and objectives.

Peak Shaving Explained

Peak shaving is about reducing energy consumption during peak demand. As its name suggests, it involves ‘shaving’ energy peaks. At peak demand, the facility reduces consumption through curtailment or draws power from an alternative energy source. 

Peak shaving strategies include:

• Curtailment: A facility powers down non-essential machinery and operations to reduce consumption.
• On-site generation: A facility installs an onsite energy source that produces electricity during peak times. Renewable resources include solar and wind turbines. These have great flexibility when paired with energy storage. Non-renewables include gas or tier-4 diesel-fueled generators.
• Battery energy storage systems: These solve for the intermittency of renewables. They store energy when renewables are abundant – and electricity is cheaper – and discharge to the facility at peak times. These systems can also generate revenue through providing grid services.
• Energy efficiency: Measures include adjusting a facility’s global temperature and optimizing chiller temperature setpoints.

Load Shifting Explained

Load shifting also aims to reduce stress on the grid during peak times. Energy consumption shifts from peak hours to off-peak hours when demand is the lowest. It doesn’t actually reduce energy usage. Rather, it changes when energy is drawn from the grid.

There are several technologies for load shifting:

• Battery energy storage systems: These can store energy from the grid at low cost during off-peak hours and discharge into the facility at high-cost peak hours. 
• Load shifting without energy storage: A facility shifts operation schedules for everything from thermostats and HVAC to equipment. Moving energy-intensive activities to off-peak hours.

Peak Shaving vs. Load Shifting: Which is Right for Industrial Facilities?

Many industrial facilities choose peak shaving as they have inflexible loads that can’t shift to low peak hours. For example, there might be an HVAC system that’s crucial to the facility’s operations or a machine that needs to run continuously. Peak shaving reduces its heavy demand charges and energy usage with limited impact on operations. 

The ability to combine renewables, such as solar power and energy storage, makes peak shaving even more attractive. The batteries store the renewable energy generated during the day and discharge during peak times when the grid is under strain. This contributes to a facility’s sustainability efforts by reducing its Scope 2 emissions. 

Final Thoughts

Peak shaving and load shifting are a departure from how industrial facilities consumed energy in the past. While different, both play important roles in the energy mix. A facility's operation and its ability to integrate technologies are the deciding factors for which option works best. Consulting an energy management provider can help you make that decision.

This is an excerpt of a full article featured on Peak Power’s website.