Most sites have electrical equipment that needs to stay on 24/7, like refrigeration, servers and lighting. Switch on other equipment at the same time, such as EV chargers, heat pumps or heavy machinery, and power use rises above its normal level.
These short peaks can increase your electricity bills, especially during expensive charging periods or if they push you above your agreed site capacity. They can also make it harder to add more electrical equipment without paying to increase your grid connection. In this article, find out what peak shaving is and how it solves both.
What is peak shaving?
Peak shaving is when a battery provides cover during short spikes in power demand, so your site draws less electricity from the grid at peak times.
The energy in the battery can come from cheaper off-peak electricity you bought earlier, or from solar power you generated yourself. When demand rises, your battery releases this energy to reduce how much power the site takes from the grid.
Definition: kW is the rate of power at any moment, while kWh is the total energy used over time.
Here's how it works.
Let’s say a hotel’s base load is 200 kW. This is the power it normally needs to keep things running. But it wants to keep how much power it takes from the grid at any moment below 250 kW (known as grid import). That’s because 250 kW is its import limit, or the agreed level of power the site can draw from the grid before extra charges may apply.
At breakfast and dinner, its load (level of usage) climbs to 270 kW for the kitchens, air conditioning and EV chargers.
The battery supplies the extra 20 kW, so grid import stays at 250 kW instead of rising to 270 kW. This means:
- Lower bills: Its spikes are smaller, and the stored energy cost less or came from on-site solar, so they pay less
- More power: The battery provides the extra power the hotel needs during busy periods, without pulling more from the grid
Why demand peaks are important to commercial sites
Demand peaks matter because they affect two things:
- How much you pay for electricity
- How much room you have to add more equipment
How peaks push up your bills
Your network operator (the company that owns the local cables) sets or agrees your import limit. Go over it and they can charge you extra.
On top of that, your bill includes other charges tied to your peak power use or the times when you use power. These apply in both Great Britain and Ireland, though they may be structured or billed differently:
- Capacity charges: A fee for the connection capacity you need to handle your peaks
- Network charges: What your network operator charges for using its cables (like DUoS, Distribution Use of System)
- Time-of-use tariffs: You pay more per kWh at peak hours of the day
How peaks hold back your growth
Growing businesses often need more grid headroom (the gap between your current peaks and import limit). For example:
- A hotel adds EV chargers, stacking more demand onto an already busy breakfast service
- A manufacturer adds a production line, running more machinery alongside existing kit
- A retailer adds cold storage, with freezers needing power around the clock
Each new piece of equipment you add to your electrical setup can push your site past its import limit. If you have a constrained connection (you're already close to your import limit), this means a slow and expensive upgrade may be needed before you can add more load.
Peak shaving can help you add extra equipment without paying for a connection upgrade, as long as the battery can cover the extra peak demand and keep your site within its import limit.
How battery peak shaving works
This is how peak shaving works:
- Your battery charges when electricity is cheaper or your solar output (power from your solar panels) is available.
- The control system is the software that runs your battery. It uses real-time data (pricing, demand and weather) to decide when the battery should charge, hold or discharge.
- When your demand nears your chosen grid import threshold, such as 250 kW in the hotel example, the battery discharges so you stay below that line.
Many control systems are fixed, charging, holding, and discharging energy at the same time every day. The problem is that this approach doesn't adapt to what's happening on your site.
The most effective control systems adjust as your site changes. They track your load profile, or your pattern of power use across the day. That pattern changes with factors like solar output, EV charging and on-site demand. If your control system doesn't track those changes, you're leaving money on the table.
Example: In June, your solar charges the battery during the day, so it's ready for evening peaks. By November, solar generation is lower so your smart control system tops up the battery overnight with cheap off-peak electricity instead.
A fixed system doesn't make that switch, so your battery may have little or nothing left when the November peaks hit. You end up paying more of the peak from the grid, just like you would without a battery. And because some charges are linked to your highest demand or agreed capacity, one badly timed peak can still push up your costs.
Peak shaving vs load shifting
While peak shaving cuts the height of demand spikes, load shifting moves energy use from expensive hours to cheaper hours.
Depending on your control system, your battery can do both, but it has to balance how much stored energy it saves for each job.
| Question | Peak shaving | Load shifting |
|---|---|---|
| Purpose | Reduce the highest demand spike | Move grid electricity use to a cheaper period |
| How the battery does this | Discharges when there is a spike in your demand | Charges when power is cheap and discharges when it's expensive |
| Best for… | Sites where short peaks increase charges or stretch the import limit | Sites where prices vary a lot through the day |
| Main risk | Battery is not available during the peak | Battery runs out before a bigger peak hits |
But the battery only holds so much energy. Use it heavily in the morning, and there might not be enough for a bigger afternoon peak. The right balance comes down to your prices and your peaks. If prices change a lot throughout the day, you may save more with load shifting. If your peaks are large, you save more with peak shaving.
When peak shaving works well
Peak shaving works well when your site has:
- Regular short power spikes
- Charges on your bill that rise with your peaks
- A constrained import limit (you're already close to the most power you can draw from the grid)
- On-site solar
- A growing EV charging load
- A battery running on a fixed schedule
Typical good fits include manufacturing, hotels, care homes, and EV charging hubs.
In these settings, capacity charges, network charges and similar peak-related fees can quickly add up. Peak shaving is an effective way of avoiding an expensive connection upgrade.
When peak shaving doesn’t add much value
Peak shaving may not be worth it if your site has:
- a flat load profile (power use that stays fairly steady with few spikes)
- rare or unpredictable peaks
- a contract that doesn't charge extra for peaks
- a battery too small to last through your peaks
- an inverter too small to keep up (the equipment that controls how fast power moves between battery, site and grid)
- rules on battery use (backup needs, battery health, or export limits on power sent back to the grid)
How much can peak shaving save?
It depends on how big your spikes are, what they cost you now, and what your battery can do.
To put a real figure on yours, you'll need:
- half-hourly meter data, at least 12 months
- current tariff and contract end date
- maximum demand reading and agreed import capacity, or MIC figure in Ireland
- battery capacity and power rating
- inverter discharge rate
- solar generation profile or solar system size
- export limit, if any
- EV charger load and expected growth
- backup or resilience requirements (power needed during outages or for critical equipment)
- current battery operating mode and threshold settings (the rules that tell the battery when to charge or discharge)
Without this data, any estimate is just a guess. With it, you can model the actual savings against your real peaks, tariff and battery.
GridVolt note: Want to find out what peak shaving could save your site, but concerned you don’t have all this data to hand? Get in touch and we can show you what we need, review your current setup and model the likely saving.
Is peak shaving right for your site?
To find out whether peak shaving is right for your site, book a review to discover:
- When your peaks happen across the day, week and year
- How often your peaks occur
- What your peaks cost
- Whether your battery is available before each peak
- Whether your battery is discharging too early on smaller peaks
- Whether better control could improve your result without changing the hardware
You'll also learn whether you have spare battery capacity that could earn extra revenue. If you do, you may be able to earn market-linked trading revenue through GridTrade on compatible GB sites.
The priority is still making sure your site has the stored energy it needs. But where spare capacity is available, GridTrade can use it when market prices make it worthwhile.
GridTrade is GB-only and not yet available in Ireland. For sites in the Republic of Ireland, the priority is solar self-consumption (using more of your own solar rather than exporting it) and better control of your battery and site demand.
How GridVolt improves peak shaving
GridVolt Energy Manager is a control layer (specialist software) connected to your existing site setup. It monitors your whole-site consumption in real time to decide what your battery does next.
It uses a 48-hour forecast to predict electricity prices, how much power your site needs, and how much solar power you are likely to generate. The forecast updates 96 times a day, and Energy Manager re-plans every 15 minutes what your battery should do next.
So, unlike fixed systems, your battery responds to what's actually happening on your site.
Energy Manager connects to the rest of your existing site assets, including:
- Other batteries
- Solar arrays and connected equipment
- EV chargers
- Heat pumps
- Building management kit like heating and ventilation
- Local controllers/gateways including Modbus and BACnet
In one live deployment, GridVolt improved battery savings by 41% in the first 70 days. Ask us about GridTrade to find out whether your spare battery capacity could also earn market-linked revenue on compatible GB sites.
Click here to contact us and tell us about your site. We’ll review your setup and show you what may be possible.