There is a line on the electricity bill that few companies read and even fewer optimise. It is not the energy price or tax but the demand charge – and for industrial and property customers it is often a significant part of the grid bill.
The demand charge measures the peak, not consumption
The energy charge is paid for every kilowatt-hour. The demand charge is instead set by the month’s highest measured average power. The grid company measures power in 15-minute periods, and the single period in which power was highest sets the demand charge for the whole month.
In practice this means a company can pay the same demand charge whether the peak lasted fifteen minutes or fifteen days. One Monday morning when the compressors, furnaces and ventilation start at the same time is enough.
That is why the demand charge is a different kind of savings target from energy consumption: it is not reduced by consuming less but by consuming more evenly.
Where the peaks come from
The typical causes of peaks are the same at almost every site:
- Simultaneous start-ups. At the start of the shift everything switches on at the same moment.
- Heating and cooling in cold or hot weather, when electric heating, heat pumps and chillers run at full power alongside production.
- Charging and storage tanks. Charging forklifts, electric vehicles and hot-water tanks often coincides with the start or end of the working day.
- Automation setpoints. Ventilation boost or return from night setback at the same moment as production.
The peak is rarely one big machine. It is ten medium-sized machines that happen to start in the same quarter hour.
How the peaks are found
Demand charge optimisation starts with data, not guesswork. The grid company’s metering data is available at 15-minute resolution, and it shows for each month:
- When the peak occurs – weekday, time of day, weather.
- How far it exceeds the normal level – if the peak is 30% above a typical working day, the potential is clear.
- How often it repeats – a one-off deviation or the same pattern every morning.
Once the cause is known, the measure is usually obvious and cheap.
Three ways to shave the peak
1. Staggering. Start-ups are spread over a 15–30 minute window. Compressor at 6:00, furnaces at 6:15, ventilation boost at 6:30. Consumption stays the same, the peak drops. This is often just a change in the automation time schedule.
2. Load control. The automation gets a limit: when total power approaches the set level, non-critical loads (charging, tanks, heating) drop off briefly. Production notices nothing.
3. Battery storage. When loads cannot be shifted – for example when the process needs everything at once – the battery discharges during the peak and charges in quiet periods. The investment is larger, but the same storage can also earn revenue on the reserve markets, so payback is calculated from two sources.
Grid connection and subscribed capacity
Alongside the demand charge, check the sizing of the connection and the contract. Many connections were built for a bigger need than today’s operation requires, and an oversized basic fee is paid for years. On the other hand, a connection that is too small can prevent EV charging or adding a heat pump – size it for future consumption, not past.
What this means in euros
Shaving the demand charge is an unusual savings target in that the measure is often free or nearly free and the effect shows on the next bill. Changing the time schedule costs an hour of work; adding load control to the automation a few hundred euros; battery storage is an investment whose profitability is calculated case by case.
The first step is always the same: look at a year of metering data and find the peaks. It tells in minutes whether there are savings in the demand charge and how much.
We calculate the demand charge potential with your actual metering data. Read about demand charge optimisation or check whether the energy audit obligation applies to your company.