08/05/2002

In Demand

Controlling electricity costs with peak shaving energy management

 

A Close Shave

Reducing energy usage for companies isn’t as easy as flipping off a light switch. Here is an example of how one Eaton Corp. facility saved money. The facility used an average 1.4 million kW hours/month at on-peak rate of 3.41 cents/kW hour and off-peak rate of 2.10 cents/kW hour. It paid a monthly demand charge of $36,500.

Since most utility companies allow you to choose the timeframe, you are charged the highest rate; the facility shifted one hour of production to off-peak time, saving $114.62/day or $27,508/year. Also, utility companies charge a demand charge for the highest 15-minute interval of usage over a month. Utility companies can provide a data chart outlining power usage, and you may find your peak demand occurs consistently each month due to production schedules. Eaton reduced energy consumption to the second highest peak on the chart, reduced usage by 5 percent, and saved $2,037/month.

Managing energy costs may sometimes leave building managers feeling as if they are chasing the wind. Whether applying new technologies promising a high return on investment or implementing a plan relying on buy-in from tenants, achieving real energy and dollar savings is the goal.

One option for controlling electric costs is peak shaving, a method of energy management that involves using generators, soft starts, and other equipment to “shave” energy costs. The goal of peak shaving is to lower the spikes of electrical demand that occur throughout the day. Lowering these spikes can reduce costs associated with electric consumption and demand charges.

To develop a peak shaving strategy, it is important to understand the two components of an electric bill: energy usage and demand charges. Energy usage reflects the amount of energy used during the billing cycle – the more energy you use, the more you pay. Usage is further broken down into peak and off-peak hours. Energy used during peak hours often costs 35- to 50-percent more than energy consumed during off-peak hours.

The demand charge is typically 40 to 50 percent of the energy bill. Demand charge is calculated by the utility and reflects the average power used in one month over a specific period of time, usually 15-minute increments. At the end of the month, utilities charge a demand rate for the highest 15 minutes of usage over the entire month.

Implementing peak shaving can help reduce costs of energy consumption and demand charges. One effective way to peak shave is to operate a backup or emergency generator when the building is drawing the highest level of utility electricity. Running the generator parallel to the utility power will reduce the consumption of utility electricity. This will also lower the demand charge by lowering the usage spikes that occur throughout the day.

If buildings professionals choose this option, they must consider the demands placed on their generator. There may be loads in the system requiring a high in-rush of power to start. The generator must be able to handle the maximum draw of these loads. If it cannot, provisions must be taken to draw utility power until these loads are operating within the normal range.

Installing soft starters in place of electromechanical starters on some loads can also be used for peak shaving. Soft starters can help lower electrical peaks when used to replace traditional starters on loads requiring a high in-rush of power to start. Soft starters allow the attached device to ramp-up gradually, reducing the initial draw that creates usage spikes and impacts the demand charges. (Whereas a device may require 1,600 amps to start and 500 amps to operate using a traditional starter, a soft starter can reduce the initial draw from 1,600 amps to 750 amps.)

To build a peak shaving plan that is effective for their facilities, buildings professionals should request an energy usage history from their utility companies. Based on the data, they can then address the situation by determining when energy usage is at its highest point of the day.

Neil O’Shea is the product manager, Eaton Corp.’s Cutler-Hammer business unit (www.ch.cutler-hammer.com), based in Pittsburgh.

 


Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.

Add highly responsive multi-zone comfort to any building project, in any climate. Our CITY MULTI H2i R2- and Y-Series VRF systems give you flexibility to fit the needs of any building. Enjoy 100% heating capacity at 0°F outdoor ambient, and 85% heating capacity at -13°F outdoor ambient.  For more information, log on to www.mitsubishipro.com


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Tennant Company is a recognized leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. With thousands of satisfied customers already using award winning ec-H2O technology, why not see what you're missing? Test ec-H2O on your soils in your facility. Get a free demo.

 

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Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.

Add highly responsive multi-zone comfort to any building project, in any climate. Our CITY MULTI H2i R2- and Y-Series VRF systems give you flexibility to fit the needs of any building. Enjoy 100% heating capacity at 0°F outdoor ambient, and 85% heating capacity at -13°F outdoor ambient.  For more information, log on to www.mitsubishipro.com


Tennant Company is a recognized leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. With thousands of satisfied customers already using award winning ec-H2O technology, why not see what you're missing? Test ec-H2O on your soils in your facility. Get a free demo.


Tennant Company is a recognized leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. With thousands of satisfied customers already using award winning ec-H2O technology, why not see what you're missing? Test ec-H2O on your soils in your facility. Get a free demo.

 

Replace core drilling with Connectrac In-Carpet and On-Floor Wireways, the proven connectivity solution in open interior spaces of all kinds. These elegant low-profile wireways are great for AV / telecom connectivity wherever it’s needed.

Bluebeam® Revu® simplifies digital facilities document management from design review to leveraging as-builts, maintenance manuals and O&Ms submittals.


 
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