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Understanding Peak Demand

Energy costs for large commercial buildings can vary widely based on when the energy is consumed. Reducing electric consumption during the single peak demand hour during the year can save thousands. The challenge is knowing when that hour will occur.

Energy costs for large commercial buildings can vary widely based on when the energy is consumed. Due to the complexity in energy pricing, operators of two identical buildings in the same city can consume the same amount of energy, yet pay substantially different amounts for that energy.

Why? As a consumer of electricity, you pay for both the actual kilowatt hours worth of energy you consume as well as the amount of energy that needs to be available to meet your requirements during your peak demand.

Each year, many regions of the U.S. identify an electric customer’s capacity requirement based on the preceding year’s peak hour. At year end, Independent System Operators (ISOs) identify retrospectively the day and hour during which peak demand occurred. Customers are then allocated capacity for the upcoming year based on their peak-hour demand during the previous year. This allocation is often referred to as a “capacity tag” in the Northeast. This allocation can comprise up to 50 percent of a large commercial-building operator’s monthly supply cost. That can equate to up to 30 percent of total monthly electric cost.

Identifying The Peak Demand Hour – And Reducing Demand

Clean Peak Energy’s patented strategic-response control system predicts the hour during which demand will reach its peak. The system then works to reduce the building’s demand load during that peak hour while maintaining building comfort. When the building’s peak-hour demand load is reduced, the installed capacity cost allocated to the building for the is reduced. The lowers electricity costs for the building for the next 12 months.

The system also determines the most efficient time of day to cool a building. It can engage HVAC systems based on weather data, the building’s system efficiency and the building’s construction characteristics. It can determine which chillers in the building’s system operate most efficiently and how much building should be cooled overnight and in the early-morning hours. This allows the building’s drywall and concrete surface area to serve as a means of thermal energy storage. By slowly releasing thermal energy during the day, augmenting demand on the building’s HVAC system, the building can use less energy to stay within a target temperature range during high-cost peak-demand daytime hours. 

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Large office buildings can substantially reduced peak electricity demand and HVAC energy use through Clean Peak Energy’s patented technology that manages thermal energy storage within the building itself, and proactively adjusts electricity use during periods of peak demand.

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