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Peak Profitability with Non-Peak Usage

Profitability ImageUsing energy efficiently has always been a relatively easy way to save money. But sometimes, when you use it is as important as how you use it. Typically, if you use power during peak energy periods, it will cost you more.

“Peak energy is associated with the energy used during the highest energy usage periods throughout the day and year,” explains Michael Flores, Director, Services & Technology at Direct Energy. “In the Southern part of the U.S., this generally equates to 12 p.m. to 8 p.m. during the peak cooling season—the warmest months of the year.  Non-peak energy relates to low-energy usage periods, such as morning and evening hours and cooler seasonal temperatures, which means lower A/C needs.  In the northern part of North America, peak/non peak times can be switched.”

So how can you take advantage of these periods of lower energy use? Flores gives a few examples:

  • Shift manufacturing processes to off-peak times and allowing employees to utilize a flexible work schedule to reduce energy consumption during the peak times of the day. 
  • “Any demand-side management program that reduces the kW used by the system will also reduce the peak demand,” Flores says.  Try lighting retrofits, installing more efficient HVAC equipment and the use of building automation controls. 
  • Practice demand limiting on HVAC equipment, where the equipment is programmed to only use a set percentage of power during peak intervals; “peak shaving” through the use of on-site power generation sources, such as stand-by or emergency generators; and thermal storage in which chilled water is produced during off-peak hours and distributed during on-peak hours so that chillers can be turned off. 
  • Ask your utility about tariff-based incentives or load-shedding programs in which customers are given a lower rate in return for shedding load at the request of the utility during certain peak intervals,” Flores adds.
  • consider a time-of-use (TOU) plan if it’s available from your utility. TOU means that electricity prices are set for a specific time period on an advance or forward basis, typically not changing more often than twice a year. Prices paid for energy consumed during these periods are pre-established, allowing users to more efficiently manage their energy costs by shifting usage to a lower cost period. “It’s important to note that not all utilities offer TOU. However, where they are available, companies can greatly benefit from these plans,” notes Flores.

Smart non-peak usage can also make you a good corporate citizen. In order for generation companies to meet the power requirements of consumers during peak demand, they often have to revert to using more costly and less efficient forms of generation, which can lead to more emissions during the peak generation times. In that sense, the more work you do in non-peak times, the greater your contribution will be toward easing overall demand.

“It’s important to understand the programs your specific utility offers in relation to peak and non-peak rates,” Flores advises. “Once you understand what options are available to you by your particular utility, a demand-side management program can be put in place to help you successfully manage your energy strategy.”