How does Lithtech Battery work for Peak Shaving?

How does Lithtech Battery work for Peak Shaving?

In the energy industry, peak shaving refers to leveling out peaks in electricity use by industrial and commercial power consumers. Power consumption peaks are important in terms of grid stability, but they also affect power procurement costs: In many countries, electricity prices for large-scale consumers are set with reference to their maximum peak-load. The reason is simple: the grid load and the necessary amount of power production need to be designed to accommodate these peak loads.

Comparision Between Load Shifting and Peak Shaving

With peak shaving, a consumer reduces power consumption ("load shedding") quickly and for a short period of time to avoid a spike in consumption. This is either possible by temporarily scaling down production, activating an on-site power generation system, or relying on a battery. 

In contrast, load shifting refers to a short-term reduction in electricity consumption followed by an increase in production at a later time when power prices or grid demand is lower. Dedicated generators or electricity storage facilities owned by the power consumer can be used to bridge high-price or high-load phases, but play less of a role if production will eventually catch up again.

Peak loads and grid usage fees

Peak loads are not popular with grid operators; they must design the grid based on the maximum amount of power that will be needed. Nevertheless, everyday operation at many industrial companies – such as powering up or increasing a production process – can cause fluctuating loads on the grid. It is possible to reliably detect the source of a sudden load increase by monitoring power consumption. Depending on the grid operator, these peaks are used to calculate grid usage fees assessed to certain power consumers. The following example illustrates how these additional grid fees are calculated for a medium-sized company in Germany.

Calculation example

A company has a constant load of 4,000 kW throughout the year without peak loads. The company pays a fixed annual grid fee, which is assessed per kilowatt. In this example, this is 50 € per kW: 4,000 kW x 50 € = 200,000 € per year in grid charges. A special production order causes an exceptional peak load of an additional 500 kW, which lasts for just 30 minutes. The grid fee increases immediately, with additional costs of 25,000 € based on 4,500 kW of annual consumption. This is just to cover grid usage and does not include the cost of electricity utilized by the company.