01
Understanding Peak Demand Charges
Peak demand charges are based on the highest power draw your facility experiences during a billing period. This peak—even if it lasts just 15 minutes—sets your demand charge for the entire month.
- Demand is measured in kilowatts (kW)
- Utilities need capacity for everyone's peak
- Your demand charge subsidizes grid infrastructure
- Ratchet clauses can lock in high demand for months
02
Identifying Your Peak
Before you can reduce peak demand, you need to understand when and why it occurs. Most facilities have predictable patterns that can be managed.
- Review interval data from your utility
- Identify which equipment contributes to peak
- Map operational schedules to demand patterns
- Look for simultaneous startups and overlapping loads
03
Peak Reduction Strategies
Multiple strategies can flatten your demand profile and reduce peak charges without impacting operations.
- Load staggering: Sequence equipment startups
- Load shedding: Temporarily reduce non-critical loads
- Thermal storage: Pre-cool or pre-heat during off-peak
- On-site generation: Shave peaks with generators or batteries
- Automated demand response: Real-time load management
04
Technology Solutions
Modern energy management systems can automate peak demand reduction with minimal human intervention.
- Building automation systems (BAS)
- Demand controllers and load managers
- Battery energy storage systems
- Smart thermostats and connected devices
Key Takeaways
What to remember from this guide.
- 01Peak demand charges can exceed energy charges
- 0215-minute peaks set charges for entire billing period
- 03Load staggering is often the easiest first step
- 04Automation makes demand management sustainable
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