Peak shaving

Peak shaving is a powerful strategy to optimize energy consumption and reduce costs. How can Spirii help your business implement effective peak shaving strategies?

Energy costs are one of the key considerations for any business that deals with electricity – and charge point managers (CPOs) are no different. EV drivers expect to be able to charge at all hours of the day, and in ever-increasing numbers, all of which puts strain on the energy grid.

Peak hours often mean spikes in energy usage, and, in turn, that can mean hefty charges for electricity. To manage this, many businesses employ peak shaving techniques – a software-based solution for mitigating these spikes and optimising costs.

But what exactly is peak shaving? And what does it mean for players in the eMobility space? Here’s everything you need to know…

What is peak shaving?

Peak shaving is a strategy for minimising cost during peak energy consumption hours, by scaling down usage or supplementing it with alternative energy sources.

Energy usage has always had peak usage hours, defined by the way humans naturally behave. The lights in your home, for example, are more likely to be on in the evening than in the day. With businesses like eMobility, there are peak times in the day when drivers are more likely to want to charge their EVs – either side of working hours, for instance.

That time-based demand increase often comes alongside higher electricity costs set in place by the energy providers. Peak shaving, then, is the term given to techniques used to manage against these spikes.

The process involves identifying peak times and scaling power usage so as not to exceed a specified average kWH consumption figure.

Peak shaving and EV charging

Here’s the thing with EV charging: drivers aren’t an organised mass – they’re all individual customers. As such, they’re prone to want to charge at a time that suits them, regardless of the current energy price.

That often results in busy times where CPOs need to draw a lot of energy from the grid, and that tends to come at a premium.

There are a bunch of ways that CPOs can handle this, peak shaving being just one. But each solution, whether it’s dynamic load balancing, vehicle-to-grid technology, or load shifting (which we’ll come on to later) all rely on intelligent, interconnected software that can reduce the impact of these peak demand surcharges.

Analogy time! Imagine that achieving your desired average kWH consumption cost is like trying to make your phone last all day long. To do that, you'd probably turn off unnecessary apps, lower your screen brightness, and switch to power-saving mode. These techniques are similar to the ones employed by CPOs to reduce their peak energy usage.

How does peak shaving work?

There are two sides to peak shaving: demand reduction and supply-side management.

Let’s look at how each one works:

Demand reduction peak shaving

Demand-side reduction is all about reducing energy consumption from the grid during those peak hours. There are lots of ways to achieve this, based on who it is that’s trying to cut down.

If it’s a person in a house, for example, strategies for demand reduction peak shaving might mean lowering the thermostat, switching off unused lights and powering down any non-critical equipment.

If it’s something like a factory that can’t minimize its usage in that same way, the alternative is to reduce demand on the grid by utilising alternative power sources. That might be through energy storage, like battery systems that can harvest and store energy from off-peak times.

The process here would be to draw a surplus of energy while rates are low and then store it for use during peak times. In some cases that may also be supplemented from renewable sources like solar panelling.

Supply-side management peak shaving

Whereas demand-side peak shaving is all about saving on energy costs, the supply side of things focuses more on preventing grid overloading, and long-term energy supply management.

That generally means reducing the overall energy output. Again, battery storage units can be used here, as well as switching to power sources like solar or wind.

Energy suppliers can also form agreements with larger energy users – like charging station operators – to employ demand response solutions that intelligently distributes and scales charging amongst every vehicle, reducing the overall concurrent demand.

In either case, the effect here is that, during peak hours, energy suppliers limit the amount of available power to protect the grid and manage energy usage over time.

Peak shaving vs. Load shifting

Whereas peak shaving is an effort in reducing energy usage, load shifting is one of moving the burden to different times of the day.

This is typically used in non-critical applications, where rescheduling energy usage doesn’t have any major knock-on effects. A factory that needs to produce raw materials 24/7, for example, can’t really move that energy usage without sacrificing its yield.

EVs, though, are prime candidates for load shifting. In practice, this is a process that sees smart chargers proactively manage the timing of a charging session – in many cases postponing the charge until energy prices have fallen under a certain threshold.

Benefits of Peak shaving

Peak shaving has benefits for both energy users and energy suppliers. Managing and preventing grid strain is an important job, but it’s a win-win when it also comes with cost savings. The key benefits here are:

Reduced energy costs

For businesses like EV charging providers who use lots of energy, peak shaving is vital for cost management. Being able to effectively reduce reliance on the grid – as well as work symbiotically with it – removes worries about peak hours dramatically affecting electricity bills.

Improved grid stability

Peak shaving on both sides of the equation – demand and supply – work to ensure that the energy grid can grow sustainably. As more and more EVs and chargers come online, it’s going to be more important than ever that we can manage energy usage through intelligent distribution and ways to mitigate surges during popular charging times.

Increased operational efficiency

For energy suppliers and users, peak shaving is just one among many modern strategies that work to ensure uptime and lower costs. When managed through smart software that can handle things automatically, peak shaving helps businesses offer a reliable service that can mitigate outages and handle growing demand without cost concerns.

Peak shaving in practice

For CPOs, keeping on top of energy costs, and being able to play ball with the energy grid, are important priorities. In a day-to-day sense, peak shaving allows for greater control over the cost of electricity while still offering reliable service to customers. Here’s how that would work in practice:

  1. Energy monitoring tools are used to track usage over short time intervals
  2. When a spike is detected in one interval, peak shaving protocols trigger for the next
  3. The business switches to stored energy or uses load balancing to minimise the power being used in this subsequent time interval
  4. This scaling up and down of power usage results in a manageable average energy use over the course of a day

At Spirii, we’re pioneers in building robust systems to help CPOs and EV fleet managers keep on top of their energy spending, and maintain mutually beneficial partnerships with the energy grid.

We do this through an ever-evolving roster of software-based features. Dynamic load balancing, Demand Response, Dynamic Pricing and Vehicle-to-Grid technology work alongside peak shaving systems to make overspending impossible – and to keep customers happy.

The best part? We make managing all this a breeze. Spirii Connect is our user-centric, intuitive dashboard designed to take make running a super sophisticated charging business feel like child’s play – with new tools and features added all the time.

You can learn more about Spirii’s intelligent solutions here.

Peak shaving FAQs:

What are the benefits of peak shaving?

Peak shaving strategies reduce electricity costs, improve grid stability, lessen the need for additional power infrastructure, and can help integrate more renewable energy sources. All this makes peak shaving mutually beneficial for both energy users and suppliers.

Is peak shaving worth it?

Yes! For many businesses (and households), peak shaving is definitely worthwhile as a cost-saving measure. The initial investment required in terms of equipment and energy monitoring systems is often recouped over time through lower energy bills and, in some cases, reimbursements from utility companies in exchange for reducing demand during peak times.

What’s the difference between peak shaving and load shifting?

Peak shaving aims to reduce the maximum power demand, often by using alternative power sources or reducing overall consumption at specific times. Load shifting moves that energy consumption to off-peak times, without necessarily reducing the overall usage.

What is solar peak shaving?

Solar peak shaving uses solar energy systems to reduce peak demand from the grid. That means generating and storing solar power for use during high-demand periods. Solar systems that work with battery storage systems can help extend peak shaving capabilities beyond daylight hours.