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Energy Management: Peak Shaving
1/24/2019 12:00:00 AM
Peak shaving is a technique that is used to reduce electrical power consumption during periods of maximum demand on the power utility, allowing consumers to save substantial amounts of money. Utilities tend to have different pricing based on demand, and pricing during the peak demand hours are usually the highest. This type of pricing makes peak shaving an attractive idea to organizations with large power demands during peak hours.
One of the best ways to peak shave is by using generators to supply power during peak utility demand. Most utility companies are familiar with this type of peak shaving and may have the resources to assist in the design and implementation of the system. It is common for a facility to experience a net energy savings of between 10 and 30 percent of their electric bill with this approach. It can also be cost-effective for the utilities and independent system operators (ISOs) that control regional electrical transmission grids because they don’t have to make huge capital investments in building additional power plants, substations and power lines.
Peak shaving is a type of energy management like demand response (DR). Demand response is designed to reduce demand on the utility supply in the event of a utility grid emergency. Customers may be asked to get off the grid when power demands are economically inefficient or technically impossible.
DR and peak shaving are most viable for natural gas generators, rather than diesel generators, as the costs for achieving diesel emissions compliance in a nonemergency application often exceed the potential benefits of participating in a DR program. For example, in 2013, the U.S. Environmental Protection Agency (EPA) put forth rules to allow diesel generators to operate for 100 hours per year for DR purposes. A group of environmental regulators and advocates along with centralized generation interests appealed the rule to the U.S. Court of Appeals, which overturned the 100-hour limit in 2015. As a result, new diesel generators must be EPA Tier 4 compliant to run in DR applications. In order to have a demand response system, there are equipment requirements:
Engines require nonemergency emissions certification.
A closed transition transfer switch desirable, but not required.
Ability to remotely dispatch generator and force the automatic transfer switch (ATS) to switch is desirable, but not required.
Ability to measure the demand reduction so customer can receive financial incentives.
In the Northeast, ISO New England; NYISO; and Pennsylvania, New Jersey, Maryland Interconnect (PJM) typically manage the call for DR. However, utilities are increasingly outsourcing the monitoring and dispatch of assets to a third party, especially for commercial and industrial customers and generation.
Companies like CPOWER, Enel X and IPKeys are commonly referred to as a DR aggregator or an energy services companies (ESCo). The ESCo will deploy an energy management system to a client’s location for recording the load, dispatching power generation assets and managing the load. Working with an ESCo is often simpler for a commercial or industrial client, as the ESCo will understand the variable incentives offered by the ISO and the local utilities and can help the client maximize the economic benefit from their generator assets.
Peak shaving is not for everyone. The planning stages for the project should include engineering support, collaboration with the utility or ISO and electrical contractors, and a discussion with Generac Industrial Power to make sure it is the best solution for you.
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