What is Peak Shaving?

⸻ Beyond Energy

Senior Data Scientist, Ivona Voroneckaja, delves into the what, why and how of peak shaving in energy

Peak shaving is more than just a cost-saving measure; it’s an opportunity to rethink how we consume energy, reduce our carbon footprint, and contribute to a more resilient grid.

Peak shaving is the practice of lowering power usage during periods of peak demand on the electrical grid. It involves temporarily reducing energy consumption to prevent peaks, especially when electricity demand and prices are at their highest. Senior Data Scientist, Ivona Voroneckaja delves into the what, why and how of peak shaving in the energy sector from a data perspective. Below is an illustration of the main idea behind a peak shaving:

To illustrate the general concept, we begin with a simplified example of a woodworking factory. This example serves as a foundation that we can then expand upon to explore the broader peak shaving concept in the energy industry.

Simple example

Imagine a small manufacturing plant making furniture and other wood-based products. This factory operates various machines throughout the day. Let’s see how this factory could implement the peak shaving approach.

Current Operations

Base load: 50 kW (constant power needed for lighting, computers, etc.)
Machine A (a large lathe): 100 kW (runs 8 hours/day)
Machine B (industrial sanding machine): 150 kW (runs 6 hours/day)
Peak load (when all systems run simultaneously)

Peak Load=50 kW (Base Load)+100 kW (Machine A)+150 kW (Machine B)=300 kW

Peak shaving strategy

Let’s investigate the peak-shaving techniques this factory may implement.

Load Shifting: Reschedule Machine B to run during off-peak hours when Machine A is not operating.
On-site Generation: Install a 100 kW solar panel system that generates power during daylight hours.
Energy Storage: Add a 200 kWh battery system to store excess solar energy and use it during peak times.

Impact evaluation

Let’s try and estimate the impact of each of these initiatives.

Load Shifting: Machine B is rescheduled to operate during off-peak hours, so its power usage (150 kW) is no longer contributing to the peak demand.
On-site Generation: During peak hours, the solar power offsets the energy demand from the grid by supplying up to 100 kW.
Energy Storage: The 200 kWh battery can store energy and discharge it during peak hours. Let’s say that in this example, the battery or the solar power is used to provide 50 kW to meet the demand during peak times (outside of the toy example, in real-world scenarios, deciding how much energy to discharge from the battery and for how long is a fascinating optimisation problem).
Calculation: Now, during peak hours, only Machine A (100 kW) and the base load (50 kW) are drawing energy from the grid, while 50 kW is covered by solar panels or battery storage. New Peak Load=50 kW (Base Load)+100 kW (Machine A)−50 kW (Solar/Battery Offset)=200 kW.

Results (with peak shaving)

Initial peak load: 300kW
New peak load: 200 kW (reduced by 33%)

Beyond the toy example

While the woodwork manufacturing plant example illustrates the fundamental principles of peak shaving, these concepts extend far beyond a single industry. In today’s energy landscape, businesses across various sectors face the challenge of managing energy consumption during peak demand periods.

The following peak shaving approaches were illustrated by the toy example:

Load shifting: This strategy involves rescheduling energy-intensive operations to off-peak hours:

On-site generation: Implementing renewable or alternative energy sources to reduce grid reliance during peak times. As illustrated below, solar panels typically generate the most energy around midday. Having on-site storage solutions enables one to store that energy and release it during peak demand periods.

Energy storage systems: Utilising various storage technologies (batteries, flywheels, compressed air energy storage, etc.) to store energy during off-peak hours for use during peak demand.

In addition to those, several other peak shaving approaches are employed across various industries:

Demand response programs: Participating in utility-sponsored initiatives that incentivise reducing consumption during peak periods. For example, at the time of writing this blog, British Gas product PeakSave Green Flex offers half-price electricity for when renewable energy is likely to be abundant (if it is very sunny or windy).
Smart grid technologies: Leveraging advanced metering and control systems for real-time energy management, including smart meters for granular consumption data where the vast amount of data collected is analysed to improve grid operations and consumer services (oh hey, this is what we can help you with!)
Microgrids: Developing localised power systems that can operate independently from the main grid, such as campus or industrial park energy systems. They typically include a combination of power generation sources, energy storage, and load management capabilities (read more about those here).
Electric vehicle (EV) charging management – load-shifting can be applied to EVs by implementing smart charging systems that can be programmed to avoid peak demand times.

Why does it matter?

Peak shaving is a critical strategy in energy management for several reasons:

Grid stability: Peak shaving helps maintain balance on the electrical grid, lowering the likelihood of blackouts and enhancing the overall reliability of the system.
Environmental impact: By reducing peak demand, peak shaving can decrease the need for utilities to activate supplementary power plants. As discussed, one effective strategy for peak shaving is the implementation of renewable energy sources (on-site generation), which not only helps to meet energy needs sustainably but also minimises reliance on fossil fuels.
Infrastructure benefits: Peak shaving can also be used by utilities or plants of renewable energy to increase the capacity of the existing grid infrastructure. Such upgrades can be deferred into the future providing a more cost efficient upgrade path for the power system (you can read more about this here).
Cost Reduction: Utility companies usually impose higher rates during peak demand periods. By cutting back on consumption during these times, businesses can significantly decrease their energy costs.

Food for thought

As we look toward a future increasingly shaped by renewable energy and technological advancements, we must consider how we adapt to but also thrive in this evolving energy landscape. Hypercube is a specialist energy technology partner. We empower organisations in the energy sector with bespoke cloud, data and AI solutions – get in touch to realise the value of your energy project.