What causes peak demand?

Highest power demand on a grid in a specified period

Loch Mhor is used to generate hydro-electric energy at peak demand or in an emergency

Peak demand on an electrical grid is the highest electrical power demand that has occurred over a specified time period (Gönen 2008). Peak demand is typically characterized as annual, daily or seasonal and has the unit of power.[1] Peak demand, peak load or on-peak are terms used in energy demand management describing a period in which electrical power is expected to be provided for a sustained period at a significantly higher than average supply level. Peak demand fluctuations may occur on daily, monthly, seasonal and yearly cycles. For an electric utility company, the actual point of peak demand is a single half-hour or hourly period which represents the highest point of customer consumption of electricity. At this time there is a combination of office, domestic demand and at some times of the year, the fall of darkness.[2]

Some utilities will charge customers based on their individual peak demand. The highest demand during each month or even a single 15 to 30 minute period of highest use in the previous year may be used to calculate charges.[3] The renewable energy transition will include considerations for peak demand.[4]

Economic growth of the state is inversely associated with peak load.[5]

Demand Tariff

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Electricity network is built to deal with the highest possible peak demand otherwise blackout may happen. In Australia, demand tariff has three components: peak demand charge, energy charge and daily connection charge. For example, for large customers (commercial, industrial or mixed of commercial/residential), the peak demand charge is based on the highest 30 minutes electricity consumption in a month; the energy charge is based on a month electricity consumption. This type of demand tariff is gradually introduced to residential households and will be rolled out by 2020 in Queensland Australia. How to manage electricity bills under demand tariff can be challenging. The key solutions involve improving building efficiency and managing the operational settings of large power appliances.[6]

Time of Peak Demand

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Peak Demand depends on the demography, the economy, the weather, the climate, the season, the day of the week and other factors. In industrialised regions of China or Germany, the peak demands mostly occur in day time. However, in more service based economy such as Australia, the daily peak demands often occur in the late afternoon to early evening time (e.g. 4pm to 8pm). Residential and commercial electricity demand contributes a lot to this type of network peak demand.[7]

Peak demand is considered to be the opposite to off-peak hours when power demand is usually low. There are off-peak time-of-use rates. Sometimes, there are 3 time-of-use zones: peak, shoulder and offpeak. Shoulder is often the time between peak and offpeak in weekdays. Weekends are often just peak and offpeak in terms of managing electricity loads for the network.

Response

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Typical daily consumption of electrical power in Germany

Peak demand may exceed the maximum supply levels that the electrical power industry can generate, resulting in power outages and load shedding. This often occurs during heat waves when use of air conditioners and powered fans raises the rate of energy consumption significantly. During a shortage authorities may request the public to curtail their energy use and shift it to a non-peak period.

Power stations

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Power stations specifically constructed for providing power to electrical grids for peak demand are called peaking power plants or 'peakers'. In general, Natural gas fueled power stations can be fired up rapidly and are therefore often utilized at peak demand times. Combined cycle power plants can frequently provide power for peak demand, as well as run efficiently for baseload power.[citation needed]

Hydroelectric power and pumped storage type dams such as Carters Dam in the U.S. state of Georgia help to meet peak demand as well.

The chances that a wind farm will be unable to meet peak demand are greater than for a fossil-fueled power station, due to the ability to store liquid fuels for use during peak demand.[8]

Solar power's peak output often naturally coincides with daytime peaks of usage due to air conditioning.

See also

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References

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Simply put, peak demand is when consumer demand for electricity is at its highest. New England is a summer peaking system, which means that we typically see the highest demand for electricity in the summer due to the increased use of air conditioning. Summer peaks typically occur in the afternoon on the hottest and most humid days. Peak demand has a significant impact on costs because the more expensive generators are needed to meet the high demand for electricity.

There are two ways one can address any disparity between supply and demand: increase supply or decrease demand. In the energy market, increasing supply would mean significant infrastructure expenditures like new transmission projects or new regional power generation options in operation for all of New England. Neither are expected to occur anytime soon.

Decreasing the demand for electricity, on the other hand, costs nothing, and small changes can have a big impact. In Unitil’s service area, peak demand occurs on the hottest days of the year, between 3 p.m. and 8 p.m. Reducing consumption during peak demand can take many forms. It can be something as simple as turning the air-conditioning thermostat up a couple of degrees or waiting until late evening to run the dishwasher.

Air-conditioning equipment is used in three-quarters of homes in the United States, at an annual cost of $29 billion to homeowners. (Source: energy.gov)

Unitil recently announced the availability of time-of-use (TOU) billing, which incentivizes customers to shift the bulk of their energy consumption to off-peak times. This program is a departure from the traditional one-size-fits-all approach to billing and gives consumers more control over their electric bills. In exchange for lower rates for off-peak energy consumption, time-of-use customers agree to pay a higher rate during the hours of peak demand.

Time-of-use billing is just one way Unitil is working to reduce peak demand. Here are some ways you can help:

• Shift the use of large appliances – such as the dishwasher and clothes dryer – to off-peak hours. Many appliances have a delayed start feature that makes this easy to do.
• Push that air-conditioning thermostat up a couple of degrees. One or two degrees might not seem like much (you may not even notice the difference), but every little bit helps.
• Avoid using the oven on summer’s hottest days, as this places an even heavier burden on your cooling system. Use the microwave or grill instead.
• Unplug any unused electronic devices, and consider installing occupancy sensors for lighting.
• Keep your air-conditioning unit in tip-top shape so it can run at peak efficiency. This includes cleaning or changing filters and keeping exterior equipment free from debris.
• If you have a pool, adjust when you run the pump to avoid peak hours.
• A programmable thermostat can minimize heating and cooling costs when you’re away from home and ensure maximum comfort upon your return.
• Replace aging appliances with ENERGY STAR® models. If your refrigerator is more than 10 years old, that’s a great place to start. As climate change continues to result in extended periods of extreme weather, a proactive approach to energy consumption will help ensure that electricity is available on demand, when it’s needed the most.

Key Takeaways

• Peak demand is a term used to describe a period of time in which consumer demand for energy is the highest.
• Reducing the impact of peak demand can be accomplished by increasing the supply of electricity or decreasing the demand for it.
• Peak demand has a significant impact on energy prices because distribution channels must be capable of delivering electricity at maximum demand levels at all times.