Peak Shaving and Load Shifting: Smart Energy Management for Your Bottom Line

As Namibia’s commercial and industrial (C&I) sectors face rising electricity costs, advanced energy management strategies like peak shaving and load shifting are becoming essential tools for cost savings and operational efficiency. At Light Systems Namibia, we help businesses harness the power of solar PV and lithium-ion battery storage to unlock these benefits.

Understanding the Challenge

For commercial and industrial operations, electricity costs are not just about how much energy you use, but when you use it. Utilities impose demand charges based on your highest 15 – 30-minute period of consumption each month. Even brief spikes in electricity usage can trigger substantial charges that remain on your bill for the entire billing cycle, regardless of your average consumption.

Peak Shaving: Flattening the Curve

Peak shaving is a strategy used to lower your facility’s highest power demand during expensive peak periods. By using a solar PV system combined with battery storage, your business can use solar energy or stored power instead of drawing electricity from the grid during these times. This effectively “shaves” the peaks off your consumption profile, directly reducing demand charges.

Several solutions from brands such as Atess, Victron and Sigenergy are available and can be configured to deploy stored energy precisely when needed. Our clients typically see demand charge reductions of 20-50%, often resulting in payback periods as short as 4-6 years.

Load Shifting: Timing is Everything

While peak shaving focuses on reducing maximum demand, load shifting takes advantage of time-based rate variations by moving energy consumption from high-cost periods to low-cost periods.  

Energy storage can facilitate both peak shaving and load shifting. For example, a battery energy storage system (BESS) can store energy generated throughout off-peak times and then discharge it during peak times, aiding in both peak shaving (by supplying stored energy at peak periods) and load shifting (by charging at off-peak periods). Below shows examples of a BESS being used for peak shaving and load shifting.

Figure 1: Energy Storage can facilitate bot peak shaving and load shifting [1] 

Real-World Applications of BESS for Peak Shaving

• Factories: Charge batteries during off-peak hours. Then when in demand is high, use this stored energy to power loads, effectively shaving off the peak demand the grid would have to supply.
• Supermarkets: Run refrigeration and HVAC systems on battery power during peak tariff periods.
• Farms: Irrigate or process crops using solar and battery systems during low-tariff times.
• Office Buildings: Power lighting and IT infrastructure with stored solar energy during afternoon peaks.

Financial and Operational Benefits

Peak shaving can lower electricity costs by reducing demand charges and shifting usage to cheaper periods. These strategies not only result in cost savings but also contribute to greater energy independence and improved resilience against grid outages. Additionally, by optimizing the use of renewable energy sources such as solar power, companies can reduce their carbon footprint and actively support their sustainability goals.

Conclusion

Every facility has unique energy consumption patterns and opportunities. Our team offers comprehensive energy assessments that identify your specific peak shaving and load shifting potential. Contact us today to discover how smart energy management can strengthen your bottom line while supporting your sustainability objectives.