Reduce Demand Cost By Staggering Equipment Usage

Power companies charge their customers for the peak kW demand each month. This is done to encourage their customers to reduce the power spikes in their operations. By law, the power companies must maintain a “spinning reserve” to account for the spikes in the user demand. However, it is expensive for the power companies to maintain reserves at high levels.

The power company customarily measures the demand in the plant by measuring the consumption of electric power over consecutive 15-minutes or 30-mintues intervals throughout the month. The peak demand is then selected as that interval which has the highest kWh consumption and is used to calculate the kW consumption. Peaks in demand are caused by several factors. One of these factors is the operation of equipment that consumes much power like motors, compressors, etc. Demand cost can be reduced via systematic scheduling of this equipment based on the monitored demand pattern in such a way that the peak is shared over a longer time interval or shifted to the off-peak hours. At a injection moulding facility, approximately 200 kW of billing demand is reduced by staggering the grinder usage to off peak hours which saved a significant $2,200 a year.