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The cost of electricity is based on two components – the amount used (consumption) and the intensity of its use (demand). The demand is determined as the highest measured intensity within a certain period of time, usually monthly. Load shedding is a mechanism to help manage the way electricity is used in a business to reduce this peak demand, significantly reducing monthly utility costs.
How it works
The demand charge typically varies between 35% and 65% of the total electricity bill depending on the type of service. Many businesses – offices for instance – experience very intense periods of electricity demand for only 40-50 hours within the 168 hour week.
There are many tools to help minimize this demand peak but understanding how electricity serves the needs of the business, and how the demand charges are applied (such as billing ratcheting), are important factors in combining these tools into an effective strategy. Lighting retrofits to more energy-efficient fixtures or replacing an electric domestic hot water tank with a condensing natural gas unit are examples of one-time initiatives that serve base-load reduction.
Preventing unnecessary peak periods – such as 11:00 AM to Noon on weekdays that account for 30% higher average charges than other hours – is achievable with an intelligent load shedding control. The unit will curtail electricity to areas or systems in a manner that is pre-determined by the building manager. Slightly dimming office lights while the cafeteria load is high during lunchtime is one example. A load shedding strategy for businesses that heat lots of water can yield substantial savings with little new capital investment. For example, a Laundromat should use natural gas to heat water when the dryer load is high, then automatically reverting to electric water heating during low peak periods (taking advantage of electricity run-off rates).
Benefits
Load Shedding
What it isThe cost of electricity is based on two components – the amount used (consumption) and the intensity of its use (demand). The demand is determined as the highest measured intensity within a certain period of time, usually monthly. Load shedding is a mechanism to help manage the way electricity is used in a business to reduce this peak demand, significantly reducing monthly utility costs.
How it works
The demand charge typically varies between 35% and 65% of the total electricity bill depending on the type of service. Many businesses – offices for instance – experience very intense periods of electricity demand for only 40-50 hours within the 168 hour week.
There are many tools to help minimize this demand peak but understanding how electricity serves the needs of the business, and how the demand charges are applied (such as billing ratcheting), are important factors in combining these tools into an effective strategy. Lighting retrofits to more energy-efficient fixtures or replacing an electric domestic hot water tank with a condensing natural gas unit are examples of one-time initiatives that serve base-load reduction.
Preventing unnecessary peak periods – such as 11:00 AM to Noon on weekdays that account for 30% higher average charges than other hours – is achievable with an intelligent load shedding control. The unit will curtail electricity to areas or systems in a manner that is pre-determined by the building manager. Slightly dimming office lights while the cafeteria load is high during lunchtime is one example. A load shedding strategy for businesses that heat lots of water can yield substantial savings with little new capital investment. For example, a Laundromat should use natural gas to heat water when the dryer load is high, then automatically reverting to electric water heating during low peak periods (taking advantage of electricity run-off rates).
Benefits
- Load shedding reduces peak demand, thereby reducing electricity costs. This is typically transparent to managers
- System operation can be automatic, or programmed to alert the building manager with a recommended action to temporality shed electrical use
- Many electricity utilities offer financial incentives to reduce demand, particularly during the winter and the peak of summer
- Businesses with growing electrical needs can mitigate costly electrical upgrades, by re-distributing process-related electrical loads to remain within their current service amperage limit
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