Understanding peak load is essential for any commercial energy management strategy because it is used to determine a part of your building’s energy bill. Many electric utilities charge customers for both the actual energy they consume (the kilowatt hours) and a rate based on the amount of energy that needs to be available to serve their account based on their peak load (kW demand). Peak load is the highest amount of energy that a consumer draws from the grid in a set period of time and Peak load management is the process of strategically reducing one’s demand for electricity during the limited hours in a year when the grid is at peak capacity. Through conscious management of your load, or Peak Load Management (PLM), you can clip these peaks and significantly reduce your electricity costs, both in the current period (delivery) and during the next capacity period (supply).
To effectively manage your peak load, you need the information the utilities won’t tell you – when peak load hours are going to occur. With a predictive analytics platform, like Tango Energy & Sustainability, you will be alerted when peak load hours are likely to occur so you are prepared to act out your peak load management plan and reduce your load while saving your company money. In addition to our peak load alerts, Tango provides access to detailed peak load analytics and forecasts, analysis of peak load performance of capital or operational adjustments in the M&V module, and procurement consulting on your peak load strategy.
How It Works
Module: Peak Load
- Monitoring and Alerts: WW’s users want to keep track of the peak loads and respective forecasts for the ISOs they belong to, so they can manage their usage on foreseeably crucial days to keep their rates low. In territories with capacity charges such as PJM, NYISO, and ISONE, up to 40% of your supply rate is determined by your one or five peak-hour contribution(s). Predictive analytics monitors the grid’s consumption and weather in real-time and predicts when peak load hours are likely to occur. In this event, we alert you through day-ahead and day-of emails when the grid is expected to peak, giving you enough time to take action to reduce your demand when it’s most important.
- Peak Load WW Alert “When is the grid likely to peak” → Client Action (curtailment) = reduction in capacity obligation/avoiding fees
- Peak Load Analytics: By navigating to the Peak Load module, you will find the analytics dashboard. They are broken down into four sections/three regions: NYISO, ISO-NE, PJM-Capacity, and PJM Transmission because each ISO calculates slightly differently. In addition to the graph summarizing the peak load values for NYISO, ISO-NE, and PJM, Tango provides further detail on the usage predictions (in MW) for the week ahead compared to the YTD max peak load by percentage. Underneath the Peak Load Forecasts are the Top Actual Peak Loads YTD with the five dates on which the Peak Load (shown in MW) was at its highest, as well as the Top Peak Loads for the prior year
- Analyzing the Value Add of Peak Load: With Tango’s measurement and verification module, you are able to analyze the performance of capital or operational adjustments made to manage your peak load demand.
- Procurement Performance Analysis: Tango provides procurement consulting to ensure you’re taking full advantage of your peak load reductions when managing your RFP for electricity supply.
Use Cases
Energy Managers and Procurement teams will find our Peak Load features to be particularly useful. Managing peak load is a crucial piece in properly managing the energy efficiency of a facility or organization. As these managers implement conservation measures, monitor energy consumption, assess business decisions for sustainability, and seek out opportunities for increasing energy efficiency, they will find that peak load is a cheap and effective initial strategy for reducing energy use, incurring cost savings, and achieving emissions reductions.
Importance
The grid is generally overbuilt for the majority of the year, designed to ensure capacity at the absolute hours of the year (typically in the hottest summer months) so we don’t experience blackouts. The grid is built to meet this top demand, and then the rest of the year that capacity is unused, while costs are spread out to accommodate the most expensive peak times. To adequately plan for both T&D capacity and generation capacity, utilities assign PLC and ICAP tags to your account, essentially making sure you’re paying your fair share of costs associated with the needed T&D and generation capacity.
Just one 30-minute, or 2 consecutive 15-minute time periods in a year when a grid is peaking, or whatever the methodology is in your territory drives 25-45% of the TOTAL cost of electricity. That’s why peak load management and demand response is important, and why understanding the difference between kWh and kW is critical. By targeting your usage at certain times, as opposed to solely focusing on reducing consumption at all times, you can create significant impacts on overall costs and receive the benefit of emissions reductions on the sustainability end. This is because the peak load hours of the year are also typically the “dirtiest” from a GHG emissions standpoint. All available generation is usually dispatched to meet the highest peaks, meaning the old, dirty plants that typically can’t clear the market in “normal” times get dispatched. So by curtailing load during peak load hours, you are effectively avoiding a large ton of emissions, which can be leveraged within sustainability reporting initiatives and correlate to positive ESG outlooks for the benefit of investors, stakeholders, and sustainability reporting.
Peak Load Management should be a strategy adopted by all C&I facilities, regardless of budget as PLM does not require expensive capital upgrades and installations such as battery storage and on-site generation. Meaningful results can be achieved with low-cost/no-cost strategies overnight due to strategic planning & alerts signaling when to curtail.
