Businesses on a demand tariff can reduce electricity demand charges by controlling when their largest loads run. Under a demand tariff, part of the bill is based not on how much energy the site uses, but on its highest average demand over a short interval. A few minutes in which compressors, pumps, ovens and machines all start together can set the demand charge for the entire month, even if the rest of the month’s demand is far lower.
How demand charges work
Energex explains that on its business demand tariffs, charges are based on both the site’s power demand on the network, measured in 30-minute intervals, and the total energy used. The demand charge applies to the highest half-hourly demand recorded, either at any time in the month or within a defined charging window, depending on the tariff. Regional Queensland sites on the Ergon Energy Network have their own network tariffs, and the retail contract determines how network charges are passed on.
The consequence is that peak demand, not average demand, sets this part of the bill. Typical causes of avoidable peaks include:
- Simultaneous starts after a break or shutdown, when every machine and compressor starts within minutes
- Batch loads coinciding, such as ovens heating up while tanks are being filled and compressors are loaded
- Deferrable loads running at the wrong time, such as water transfer, tank filling and electric heating that could run in a quieter interval
- No visibility, so staff do not know a peak is building until the bill arrives
Why peaks are hard to manage by hand
A half-hour average is difficult to judge from the factory floor. The loads that create a peak are spread across the site and controlled by different people. By the time anyone notices, the interval has ended and the peak has been recorded. Manual rules, such as staggering start-up times, help but are easily forgotten on a busy day.
How automatic load control helps reduce electricity demand charges
A demand controller measures site demand continuously, projects the current interval’s average, and staggers or delays selected loads when the projection approaches a set limit.
How it works
- 1
Measure
A power meter at the main switchboard measures site demand continuously, including any solar or battery contribution.
- 2
Project
The controller projects the average for the current 30-minute interval from demand so far and the time remaining.
- 3
Act in priority order
If the projection nears the limit, controlled loads are delayed or reduced in an agreed priority order, starting with the least critical.
- 4
Restore and report
Loads are restored in sequence once headroom returns. Demand, actions and overrides are logged and reported.
Start interlocks are often the simplest and most effective measure: large motors are prevented from starting at the same time, and are brought on in sequence instead. Variable speed drives also reduce demand, as described in process pump VSD control, and compressed air sequencing avoids unnecessary compressor starts.
What a lower peak is worth
Alternatives
- Manual procedures. Staggered start-up times help, but rely on people remembering on every shift.
- Changing tariff. Sometimes worthwhile, and worth checking with your retailer. It does not reduce the peaks themselves.
- Batteries. Can reduce peaks effectively but involve significant capital cost. Controlling loads first reduces the battery size needed, if one is still justified.
- Solar. Reduces energy use, but peaks often occur when solar output is low, so it rarely addresses demand charges on its own.