Financial Sustainability: Improve business opportunities with Peak Power Demand Control

Financial Sustainability: Improve business opportunities with correct electricity tariffs
August 4, 2020
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Financial Sustainability: Improve business opportunities with Peak Power Demand Control

Continuing from our previous blog, this discussion looks at controlling electrical demand and associated demand costs. Part of the energy management process is to establish a consumption pattern to take full advantage of the premise’s electricity tariff. Clients on ALL demand type tariffs need to make sure they are controlling their electrical peak power demand and energy to minimise electricity costs. Please remember money spent on electricity costs cannot be spent on business opportunities or growing the business.

There are a variety of demand and Time-of-Use demand tariffs comprising:

  • A charge for the maximum or peak power demand which is imposed on the electricity supply system by the premises.  The demand may be kilowatts (kW) or kilovolt amps (kVA).  The peak power demand is measured in any 30-minute period during the month or year.  Usually expressed as dollars per kW or kVA.
  • A charge for the energy (kilowatt hours [kWh]) consumed during the billing period, that may include different prices at different times of the day or week.  Usually expressed as cents per kWh.
  • Fixed service and metering fees for the local network service provider.

An example of the demand cost breakdown for small business businesses, in the south-east Queensland electricity network is found at the Energex small business tariff service. 

For the large business owner in the same region, an example of breakdown demand costs is found at the Energex large customer tariff service. 

Load Reduction – Load Shed – Load Shift

Variable electricity costs are dependent upon electricity consumption patterns and peak power demand.  It is industry best practice to have an energy management system for demand type tariff customers.  There are three simple ways to reduce the variable energy and peak power demand costs:

  1. Load Reduction: Switch off equipment when not needed or use energy efficient equipment to reduce electricity consumption.  For example, use time switches to control plant and equipment, rather than running continuously.  During renovations consider energy-efficient LED lighting to replace fluorescent and high-bay luminaries.  Illumination using skylights can be replaced with solar powered LED lighting.
  2. Load Shed: Non-essential equipment is automatically switched off momentarily or load shed, during peak demand periods.  Typical equipment to load shed are hot water units, drying ovens, pool or greenhouse heating or air-conditioning compressors.  Savings are found through reduction of peak power demand charges.
  3. Load Shift: Load shifting is based on assessing the simultaneous use of high power demand plant and equipment across the premises. Site co-ordination will be required to establish time slots when certain operations should ideally be performed to reduce electricity peak power demand charges.

For those clients on demand kVA tariff, a permanent option to reduce demand charges is to use power factor optimisation.  This method is for another blog.

Please contact Susmet for a Peak Power Demand Control analysis on your site or building premises.


This blog is part of a continuing series discussing sustainability and energy management issues. Contributions featuring achievements, techniques, products, and processes are welcome.  Please feel free to contact Susmet to suggest ideas on future issues.  Whilst every effort is made to see that no inaccurate or misleading data, opinion or statement appears in this blog, Susmet accepts no responsibility or liability whatsoever for the consequences of any such inaccurate or misleading data, opinion, or statement.   

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