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Electricity peak demand charges overview
- 1. 0© 2013 Stem, Inc. 0 Tacklingpeakdemandcharges
- 2. 1© 2013 Stem, Inc. 1 Agenda •Overview of peak demand charges •Future trends in demand charges •Traditional approaches •A new approach
- 3. 2© 2013 Stem, Inc. 2 Agenda •Overview of peak demand charges •Future trends in demand charges •Traditional approaches •A new approach
- 4. 3© 2013 Stem, Inc. 3 Twopartstoanenergybill Energy charges Demand charge Total amount of energy used Highest 15-minute peak each month Demand charge Energy charges
- 5. 4© 2013 Stem, Inc. 4 Whatisademandcharge? •Monthly charge based on highest 15-min peak during that month •Typically 30–70% of total electric bill •Usually differs by season (typically higher in summer than winter)
- 6. 5© 2013 Stem, Inc. 5 Whoissubjecttodemandcharges? •Levied on certain commercial &industrial customers Largebusinesses …ontime-of-usebills …withenergyusageexceedingacertainlevel(e.g.2000kWh/month) •All states have demand charges, but at varying levels
- 7. 6© 2013 Stem, Inc. 6 Whydodemandchargesexist? • Covers utilities' fixed costs of providing a given level of power • “Hottestday in July” scenariowhere utilities have to have enough capacity on standbyto supplyALLcustomerswith heavy HVAC loads • Used by utilities to reduce peak by making it desirable to: • shiftelectricalusage from peak hours to non-peakhours • reducepower usage during peak hours • Levies higher costs on customers with spikier loads • Passessavings on to other customerswith more consistentloads
- 8. 7© 2013 Stem, Inc. 7 Howdemandchargesarecalculated •Highestlevelofusageduringa15minuteperiodoutofanentirebillingcycle •Thatusage,measuredinkW,isthenmultipliedbythedemandchargerate Speedometer – highest Odometer – accumulated Auto Analogy Analogous to demand charge Analogous to energy charge
- 9. 8© 2013 Stem, Inc. 8 Demandchargeworksheet Winterrate (e.g. Nov1 – Apr 30) Off peak Partial peak Off peak Peak kW during period x ______ rate Winter peak demand charges Peak kW any time x ______ rate + = Maximum demand Summerrate (e.g. May 1 – Oct 30) Maximum demand Off peak Off peak Peak kW during period Summer peak demand charges Peak kW any time x ______ rate + = Max peak x _____ x _____ + Partial peak Partial peak Instructions for each season: 1. Fill in boxes with peak kW for each peak period and maximum demand for the month. 2. Fill in blanks with peak kW rates from utility. 3. Multiple 1 and 2 to get charges for each peak period. 4. Add up charges for total for the season. 1 2 3 4
- 10. 9© 2013 Stem, Inc. 9 Impactofdemandcharges Customer A 50 kW load for 50 hours: Usage Energy = 50 kW x 50 hours = 2,500 kWh Demand = 50 kW Bill Energy= 2,500 kWh x $0.15 = $ 375.00 Demand = 50 kW x $28.00 = $1,400.00 Total= $1,775.00 Customer B 5 kW load for 500 hours: Usage Energy = 5 kW x 500 hours = 2,500 kWh Demand = 5 kW Bill Energy= 2,500 kWh x $0.15 = $ 375.00 Demand = 5 kW x $28.00 = $ 140.00 Total= $515.00 Identical energy usage, but very different totals due to PATTERN of energy usage
- 11. 10 Energy charges (kWh) $11,998 50% Demand charges (kW) $10,802 45% Miscellaneous $1,322 Total bill $24,123 Demand charges aren’t always obvious After adding these up, you find… Energy vs. Demand charges … and realize the demand charges are nearly 50% of your electricity bill
- 12. 11© 2013 Stem, Inc. 11 Yourdemandcharge 1.Links todemand charges for California utilities: PG&E (E-19) http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_E-19.pdf SDG&E (AL-TOU) http://www2.sdge.com/tariff/com-elec/ALTOUPrimary.pdf SCE (GS-2) https://www.sce.com/wps/portal/home/regulatory/tariff-books/rates-pricing-choices/business-rates/ 2.Contact your utility account manager They are there tohelp you understand your rate schedules
- 13. 12© 2013 Stem, Inc. 12 Agenda •Overview of demand charges •Future trends in demand charges •Traditional approaches •A new approach
- 14. 13© 2013 Stem, Inc. 13 Expecteddemandchargeratechanges Increase in PG&E rates in past 3 years 31% Source: Tariff data for Pacific Gas and Electric, San Diego Gas and Electric, and Southern California Edison is publicly available via utility websites 3-year growth rate (2010-2013) 31% 22% 9% 19.5% Average Demand Charges in CA ($/kW) $16.64 $18.74 $17.74 $17.88 $21.83 $22.92 $19.34 $21.36 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 PG&E E-19 SDG&E AL-TOU SCE GS-2 TOU Option B CA IOU average 2010 2013
- 15. 14© 2013 Stem, Inc. 14 •Aging grid & peaker plants •Proliferation of solar leading togreater grid volatility •Growth in electric vehicle charging stations •Climate change Whythistrend?
- 16. 15© 2013 Stem, Inc. 15 Agenda •Overview of demand charges •Future trends in demand charges •Traditional approaches •A new approach
- 17. 16© 2013 Stem, Inc. 16 Short–term approaches Loadshifting / shedding Perform energy-intensive operations when your facility’s demand is low. For example, run large equipment at night or early in the morning instead of the middle of the day. PeakOff-peak Off-peak
- 18. 17© 2013 Stem, Inc. 17 Short–term approaches Loadcycling Control when equipment runs. For instance, if you have six air- conditioning compressors, you can install a system that allows only three or four units to operate simultaneously. The building's air handlers will continue to circulate air and ensure a healthy environment. HVAC 1 HVAC 3HVAC 2 PeakOff-peak Off-peak HVAC 2 HVAC 3
- 19. 18© 2013 Stem, Inc. 18 Short–term approaches Interlocks & automatic controlling devices Use timers to pre-heat or pre-cool water and air during off-peak times. Some utilities will install equipment that interrupts nonessential loads at your facility for a specified amount of time in exchange for lower rates. PeakOff-peak Off-peak
- 20. 19© 2013 Stem, Inc. 19 Short–term approaches Timing of projects Be aware of when your meter is read each month. For example, if you have a project that will take a lot of energy, run that project during a billing month when you’ve already incurred a high demand charge. Month 1 Month 2 Meter reading Peak Peak
- 21. 20© 2013 Stem, Inc. 20 Long–term approaches • Energy efficiency measures • Updatinglighting • Insulationreplacement • Retro-commissioning equipment
- 22. 21© 2013 Stem, Inc. 21 Long–term approaches • Right-sizing equipment • Air-conditioning systemsarethemostcommon over- sizedequipment • LightingretrofitsshouldbedonebeforeACunitsare downsized • modernlightingwillreducecoolingrequirements
- 23. 22© 2013 Stem, Inc. 22 Long–term approaches • Equipment upgrades • Ensure equipment has motors that are the right size for their corresponding pumps • Newer, more efficient pump and motor combinations may save on demand charges
- 24. 23© 2013 Stem, Inc. 23 Agenda •Overview of demand charges •Future trends in demand charges •Traditional approaches •A new approach
- 25. 24 • Reduce spikes without interfering with operations • Work in parallel with other energy efficiency measures • Require no behavioral changes or training The ideal solution would …
- 26. 25© 2013 Stem, Inc. 25 Combine battery storage and big data analytics to reduce energy costs Advanced storage solutions
- 27. 26 How they work • Predict building’s energy usage • Charge on-site battery during off-peak • Anticipate peak events and release stored energy Max demand without storage Max demand with storage
- 28. 27 Results Reduced demand charges: lower energy bills automatically Reduced risk: eliminates the need to constantly monitor energy usage Future-proofing: allows businesses to hedge against future energy price changes Carbon savings: displaces peaker plant capacity by reducing peak loads
- 29. 28© 2013 Stem, Inc. 28 For more information on advanced storage solutions to tackle peak demand charges, visit: stem.com