Short peaks in electricity demand on your site can lead to charges for going over its agreed capacity with your electricity network operator. If you’re planning to add equipment such as EV chargers or heat pumps, they may also leave you without enough spare capacity to run them.
Below, find out how a commercial battery can provide the extra power you need during spikes in electricity use through a method called peak shaving.
What is peak shaving?
Peak shaving keeps the amount of power your site takes from the grid below a set limit during short spikes in demand. That spike may be caused by, for example, large machinery starting up or several EV chargers running at once.
Here’s how. If your site suddenly needs 420 kW to operate but you want to keep grid use below 380 kW, your commercial battery setup supplies the extra 40 kW you need. This way, your site still gets all the power it needs, but it only takes 380 kW from the grid.
You can use peak shaving to:
- Exceeding your agreed capacity:
- Stay within your connection limit
- Free up room for new equipment, like EV chargers or heat pumps
There are other ways to peak shave, like changing how you use your current equipment so they act like alternative energy storage systems, but, for this article, we’re just focusing on where a commercial battery supplies the extra power your site needs during a spike so it takes less from the grid
How does peak shaving work?
Your site meter (the main meter for the whole site) measures how much power the building is taking from the grid.
If this rises above your chosen limit, the controller tells the inverter (the device that converts the battery’s stored electricity into power your site can use) to release enough power from the battery to cover the difference.
This is what keeps grid use below the limit without denying your site the power it needs to operate.
When the spike period is over, the battery stops supplying power. The best battery optimisation software then decides when to recharge the battery next based on factors like:
- The cost of electricity
- How much solar electricity your panels are generating
- The level of power your site needs
- Whether it needs to keep power in reserve for another demand spike or backup use.
The software can also prepare for regular and expected peaks caused by, for example, a production schedule at a factory or EV charging at a courier company.
It also checks how much power the site needs at that moment, so it can react if electricity use rises sooner, lasts longer, or climbs higher than expected.
Where can peak shaving save my business money?
Peak shaving may help you avoid extra charges if your site takes more power from the grid than the limit you agree with your electricity network operator. It may also help you:
- Avoid extra charges for going over your site’s power limit (in Great Britain, this limit is called your Agreed Supply Capacity. In the Republic of Ireland, it’s called your Maximum Import Capacity, or MIC.)
- Prove your site needs less power, so you can request a lower limit that would reduce your capacity charges
- Add new equipment like EV chargers and heat pumps without having to pay for a larger grid connection
Be aware that your network operator must approve any lower limit. Plus, if you have a battery, check with your provider or energy management software company that your battery can provide enough power for the whole spike.
How much battery power do you need for peak shaving?
Your battery needs enough power to cover the difference between the amount of electricity your site needs and the limit you want to stay below.
For example, if your site needs 440 kW but you want to take no more than 380 kW from the grid, your battery needs to be able to supply that missing 60 kW for the full length of the spike in demand.
If the spike lasts 45 minutes, the battery would need at least 45 kWh of usable stored electricity:
60 kW × 0.75 hours = 45 kWh
In real life though, it’s best to go for more. That’s because you’ve got to allow for:
- Energy lost during charging and discharging
- Power kept back for emergencies
- Multiple spikes happening before your battery recharges
- Limits on how much of the battery’s stored electricity is available to use
- The length of time available to recharge
For shorter, sharper spikes, you may also need a more powerful inverter, as this determines how much power the battery can supply at once.
How do you know whether peak shaving is worthwhile?
Ideally, gather data on how much power your site has taken from the grid every half hour over the past 12 months. Look for how often spikes happen, how long they last, and how much extra demand each one creates. Also, see if they occur at predictable times and whether the battery has enough power and stored electricity to cover them.
Next, choose the limit you want to stay under, in other words, the maximum amount of electricity you want to draw from the grid at any one time.
Work out how much you save by avoiding charges for exceeding your agreed capacity. That can include any savings from a successful application for a lower capacity limit or holding off the need to invest in a larger grid connection.
You also need to factor in the opportunity cost, or the value you give up by using the battery for peak shaving.
For example, using your battery for peak shaving may mean giving up savings from charging when electricity is cheaper, using more solar power on site, or battery trading.
If you answer “yes” to three or more of these questions, peak shaving is likely to be worthwhile:
- Do spikes happen regularly without lasting too long?
- Can the battery and inverter cover the whole spike?
- Will staying below the limit create a clear saving or business benefit like avoiding an excess-capacity charge?
- Will the battery still have enough stored electricity for backup or other important jobs like covering another spike later in the day and earning income from battery trading?
Benefit from peak shaving at your sites with GridVolt
Connect GridVolt’s Energy Manager software to your existing third-party batteries and inverters with no need to change your electricity supplier.
Every 15 minutes, the software checks how much power your site needs, your tariff, solar generation, battery charge, and any power you want to keep back for emergencies. When electricity use approaches your chosen limit, it can tell the battery to supply the extra power needed so your site can keep running without taking more than the limit from the grid.
After each spike, Energy Manager decides whether the battery should recharge, keep electricity in reserve, or use spare capacity for another job. It sets aside the power your site needs before using what remains for anything else.
For suitable sites in Great Britain, GridTrade can use any spare battery capacity for wholesale electricity trading. In one agricultural site, better control increased total battery savings by 41% over the first 70 days. This came from better scheduling across several battery uses, not peak shaving alone.
To find out more, fill in the form on the right or get in touch via the contact page.
Commercial battery peak shaving: frequently asked questions
Can you use peak shaving without a battery?
Yes. You can reduce short peaks in electricity use by turning down, pausing, or delaying equipment that doesn’t need to run at a particular moment. Two examples include:
- Charge electric vehicles overnight or at a quieter time, as long as they’re ready when your staff need them
- Run heavy machinery at a different time from other equipment, as long as this doesn’t slow down the work
This type of peak shaving is only effective so long as it doesn’t disrupt your normal operations. The advantage a battery offers is that you get another source of power during spikes, meaning your site can keep running while taking less power from the grid.
What is the difference between peak shaving, load shifting, and demand response?
Peak shaving uses a commercial battery to stop your site from taking more than a set amount of power from the grid when there is a short spike in electricity demand.
Energy arbitrage changes the times when your battery charges and discharges so you buy more cheap electricity to use on-site later on when prices are higher.
Demand response changes the amount of electricity you use or send back to the grid in response to a request from an energy company or grid operator, in return for payment. This is a form of battery energy trading.
A battery can take part in some demand response services, although businesses can also respond by changing how they use other equipment.
With the right software, your battery can perform all three jobs. It may split its available power between different jobs, but it can’t use the same stored electricity twice.
For example, it may not have enough electricity left to cover a demand spike if it has already discharged earlier to avoid buying expensive electricity. The battery would need to recharge first.
Can one battery manage peak shaving alongside its other jobs?
Yes, but only if it has enough stored electricity for each job like covering demand spikes, providing backup power during an outage, battery trading, or avoiding paying for expensive evening electricity.
Overriding all of those though, the control software control software should always put your site’s needs first. It can only use the remaining stored electricity for peak shaving or any other activity.
What information does GridVolt need to assess peak shaving?
To check whether peak shaving could work at your site and what it may be worth, we need:
- 12 months of half-hourly electricity-use data, or the closest data you have
- Recent electricity bills and details of your tariff
- Your connection agreement or agreed power limit
- The make, model, power, and usable capacity of your battery and inverter
- How much battery power you keep back for emergencies
- Details of any solar panels or equipment you plan to add
- What you want to achieve, such as avoiding extra charges, adding new equipment, or lowering costs
GridVolt can then check whether your battery can cover the spikes, how much you may save, and whether you would save or earn more by using it for cheaper charging, solar storage, backup power, or battery trading.
How much can peak shaving save?
It depends on how large your spikes are, what they currently cost you, and what your battery and inverter can do.
To calculate a reliable figure, you need at least 12 months of half-hourly electricity data, details of your tariff and agreed power limit, and the power and usable capacity of your battery and inverter.
Without this information, any estimate is only a guess. With it, GridVolt can model the likely saving using your actual demand spikes, electricity costs, and battery setup.
When is peak shaving unlikely to save much money?
Peak shaving may not save much if your site has:
- Fairly steady power use with few short spikes
- Spikes that happen rarely or at unpredictable times
- A tariff that doesn’t charge extra for going over a power limit
- A battery that can’t last for the whole spike
- An inverter that can’t release enough power at once
- A need to keep most of the battery’s stored electricity for backup power
Your site needs both a spike the battery can cover and a clear financial or operational reason to reduce it.
Can peak shaving help you avoid a larger grid connection?
It may help if your battery can provide the extra power your site needs when new and existing equipment run at the same time.
For example:
- A hotel may use the battery when EV chargers run during a busy breakfast service
- A manufacturer may use it when a new production line runs alongside other machinery
- A retailer may use it when new cold-storage equipment increases its normal power needs
The battery must cover the extra power every time the equipment overlaps and for as long as the spike lasts. Ask your battery provider and electricity network operator to check this before depending on a battery instead of paying for a larger connection.
Which businesses are most likely to benefit from peak shaving?
Peak shaving is most likely to suit sites with regular, short spikes in electricity demand, charges linked to those spikes, or little spare capacity in their grid connection.
Common examples include manufacturers, hotels, care homes, and EV charging sites. However, the result still depends on your tariff, agreed power limit, and whether the battery can cover the full spike.