As a power consumer, you have an opportunity to determine how much electricity you are charged for. This information might come as a surprise to many users who do not understand the concepts of demand peaks and valleys.
When utilized properly, these two concepts can not only help you regulate your power flow and consumption but also budget more wisely and save money on energy bills.
Peak demand refers to a period of the day, season, or year when a consumer’s demand for electricity is at its maximum. It's usually the time of year when an electricity grid's electrical demand is at its peak. Peak periods are in the mornings during the winter when there is a lot of heating, and in the afternoons during the summer, when there is a lot of cooling.
Peak Demand days have historically occurred during the summer months of June to September, mainly on weekdays between 3 and 6 p.m.
Alternatively, Peak demand is estimated as the maximum quantity of energy used in a 15 to 30 minute period of time over the month, and it can have a significant impact on how your establishment's monthly rate is calculated, even during off-season months.
Because of the relationship between customer demand and power generation capacities, peak demand is significant to electricity providers. In general, if a utility's power generation capacity is exceeded, the utility must buy power from other utilities on the open market, which is costly. Alternatively, utilities can propose the construction of new power plants. However, this strategy may result in higher electricity rates and higher costs for users.
During peak demand days, the energy grid operating company issues each consumer a "tag" based on their building's total kilowatt-hours utilized during the peak hour of the peak day of the year. A term used to describe this is "Capacity Tag" or "Peak Load Contribution".
The power user is responsible for covering these capacity expenses on your monthly electricity bill. Capacity expenses can range from 15 -45% of your overall energy supply prices, depending on your load factor.
In most circumstances, these charges are included in your Fixed supply rate and paid for by your retail supplier or utility on the back end.
One of the best strategies to reduce peak load is through Load shedding, which is a way of dropping equipment that uses the highest power from your main supply source. There are several devices that may be used to monitor a building's energy consumption.
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