Two sites can cut the same kWh and see very different bills, because peak shaving and load shifting reduce different lines on it. One action can do both, but each one reduces a different line on the bill. Peak shaving reduces the charge per kW or kVA: a demand charge, a capacity charge, or the penalty for exceeding the connection limit. Load shifting reduces the charge per kWh where the unit price changes through the day. Before you choose, find the larger of the two lines on the site's bill.
Side by side
| Peak shaving | Load shifting | |
|---|---|---|
| Goal | Lower the maximum interval demand (kW or kVA) | Move consumption (kWh) to cheaper or cleaner times |
| Saves money on | Demand charges, capacity and excess capacity charges, connection upgrades | Time-of-use and peak-rate unit charges |
| Total energy | Unchanged, or roughly 10% of the shifted energy higher with a battery | Unchanged for a moved process; higher for pre-heating or pre-cooling, which add standing losses |
| Typical tools | Batteries, load shedding, generator start, EV charging limits | Scheduling processes, pre-heating or pre-cooling, charging EVs overnight |
| Main risk | The battery runs out of energy before the interval ends | The moved load lands on another load, or in another charged window |
Worked example: moving a process
A site draws a steady 100 kW in the day and 40 kW at night. A batch process adds 80 kW for 30 minutes at 17:30 every working day. The process is moved to 23:30:
| Without change | Process moved to 23:30 | |
|---|---|---|
| Demand during the process | 100 + 80 = 180 kW | 40 + 80 = 120 kW |
| Site maximum demand | 180 kW | 100 kW, the daytime base |
| Energy used by the process | 40 kWh | 40 kWh |
Moving the process shifts 40 kWh and also shaves the peak by 80 kW. For illustration, take a demand charge of €10 per kW per month, a day rate of €0.25/kWh, a night rate of €0.15/kWh and 22 working days:
| Line on the bill | Saving per month |
|---|---|
| Demand charge: 80 kW × €10 | €800 |
| Energy: 40 kWh × (€0.25 − €0.15) × 22 days | €88 |
The demand saving is nine times the energy saving, because one 30-minute event sets the demand charge for the whole month. In the 2022/23 ESB Networks schedule for maximum demand groups DG7 to DG9b, a 17:30 start also falls in the 17:00 to 19:00 peak unit rate. There, night rates start at 23:00, so a move to 22:00 would still pay the day rate.
Worked example: a battery
The process stays at 17:30. A battery controller holds site import at 130 kW. For 30 minutes the site needs 180 kW, so the battery supplies 50 kW, which is 25 kWh. With 90% round-trip efficiency at the AC terminals, the battery takes about 28 kWh back from the grid. The auxiliary and HVAC loads of the battery add to this, most of all when it cycles lightly.
The recharge is part of the design. At 50 kW, 28 kWh takes about 34 minutes. At night the site load is 40 kW, so import during the recharge is 90 kW, under the threshold. If the battery recharges at 14:00 on the 100 kW daytime base, import rises to 150 kW. That sets a new peak and gives back 20 kW of the 50 kW saving.
With the same illustrative tariff, the demand saving is 50 kW × €10 = €500 per month. The energy line changes by only 25 × €0.25 − 28 × €0.15 = €2.05 per day, about €45 per month. The battery earns its money on the demand line.
Size the energy from the area of the load above the threshold, over the longest peak you expect. If the process overruns to 45 minutes, the battery must supply 50 kW × 0.75 h = 37.5 kWh, not 25 kWh. Add a margin for forecast error and for a state of charge below full at the start of the peak, and subtract any energy reserved for other services. Once the month's peak is set, raise the threshold to that value for the rest of the billing period. Shaving below it saves nothing on the demand line and costs battery cycles. The BESS guide explains which system owns each limit.
The demand interval sets the bill
The billed demand is the average over one metering interval, not the instantaneous peak. The interval is usually 15 or 30 minutes. A 60 kW spike that lasts 2 minutes on a 100 kW base adds 60 × 2 / 30 = 4 kW to a 30-minute average. The same 60 kW held for the full 30 minutes adds 60 kW. The interval demand calculator converts the energy in one interval to average kW. For the spike, the half hour holds 50 + 2 = 52 kWh:
Because the bill counts the average, a controller can make up for a late response in the same interval. If the battery in the example starts 3 minutes late, the site imports 50 kW too much for 3 minutes, which is 2.5 kWh. To hold the 30-minute average at 130 kW, the controller must hold import at 130 − 2.5 / 0.45 ≈ 124 kW for the remaining 27 minutes. A controller that acts only on the instantaneous reading leaves the interval at 135 kW. The controller's own meter is not the billing meter either. With Class 0.5S meters and CTs on both, the two readings can differ by up to about 2%, so set the threshold at least that far below the target.
Some tariffs keep a peak on the bill for longer than one month. The U.S. Department of Energy describes ratchet clauses, where the billed demand is the higher of this month's peak and a percentage of the peak in the previous 11 months. Other tariffs charge demand only in set hours of the day, so a peak outside those hours costs nothing.
The load factor calculator shows how peaky a profile is:
A load factor of 50% says that the average demand is half the peak. It does not say whether shaving is cheap. That depends on the shape of the peak. A 30-minute peak each day above a flat base needs 25 kWh of storage to remove 50 kW. A plateau from 08:00 to 18:00 at the same load factor needs 500 kWh to remove the same 50 kW. The electricity cost calculator puts a value on the demand line.
Capacity charges in Ireland and Great Britain
Irish and GB network tariffs for larger business sites include a capacity charge on the Maximum Import Capacity (MIC) that the site agreed with the network, in kVA. ESB Networks states that a MIC set too high means paying for capacity the site does not use, and a MIC set too low brings an excess capacity charge.
A lower peak therefore reduces the capacity charge only when you also reduce the MIC. UK Power Distribution, a GB network operator, allows one reduction in 12 months, and warns that the old capacity may not come back without reinforcement (charging statement, paragraphs 2.40 and 2.41).
The excess charge is where one peak costs most. UK Power Distribution calculates the kVA for every half hour from the active and reactive energy, and applies the highest value in the billing period. It charges each kVA above the MIC per day, for the whole billing period in which the breach occurs (paragraphs 2.43 to 2.45). In Ireland, the 2022/23 ESB Networks schedule sets the surcharge for interval-metered sites at 5 times the capacity charge rate on each excess kVA, for the billing period (note 5 for groups DG6 to DG9b). In both cases a single metering interval behaves like a ratchet for one billing period.
Because the limit is in kVA, power factor matters. At a power factor of 0.9, 180 kW is 200 kVA. Both networks also charge for reactive energy above one third of the active energy, which is an average power factor of about 0.95. A battery inverter that supplies reactive power, or power factor correction, can reduce the kVA peak when a kW reduction alone is not enough.
Watch for the rebound
Most shed or shifted loads come back later. The exception is a load that is simply not needed, such as lighting in an empty area. A battery must recharge. EVs that were held back want more power later (the EV smart charging guide covers this). Thermal plant makes up the energy it missed.
A simple energy balance gives the size of a thermal rebound. A chiller that runs at 60% duty and stops for 30 minutes owes 0.6 × 30 = 18 minutes of full-capacity cooling. When it restarts at full capacity, only the 40% above its normal duty goes to pay this back, so it runs flat out for about 18 / 0.4 = 45 minutes. This is a lower bound: restart delays and any overshoot below the set point add to it. If the chiller draws 50 kW at full load and 30 kW on average, it adds 20 kW to the site for one and a half intervals after the event. If that lands on the batch process, the site sets a new peak.
Check the 30 to 60 minutes after each action as carefully as the peak itself. The EV charging capacity calculator checks whether chargers fit under the site limit in each interval.
Measure before and after
Record at the tariff's demand interval:
| Measurement | Why |
|---|---|
| Site import, per interval | The value that the bill uses |
| Reactive energy or power factor, per interval | The capacity charge is in kVA, not kW |
| Power of each controlled asset | Shows what each action did |
| Short-interval power, seconds to a minute | Shows the response and any rebound |
| Export, where the site generates | The meter may net import and export |
| Timestamps in UTC, with the interval convention stated | Some exports label an interval by its start and some by its end, so 17:00 to 17:30 can appear as 17:00 or 17:30. On clock-change days a day has 46 or 50 half hours. |
Compare equivalent periods: the same weekdays, similar weather in degree days, and similar production output. Report the measured peak reduction separately from the financial value, which depends on the actual contract. The savings guide explains how to adjust a baseline.
Peak shaving with EpiSensor
ZEM electricity monitors on the incomer and the large circuits show which loads make the peak and how long it lasts. Edge on the Gateway runs the threshold as a local Automation rule: a data trigger on site import, an open delay to ignore short spikes, and a device command that switches a relay or writes a set point. The rule runs on the Gateway, so it does not depend on an internet connection. Edge checks duration conditions once a minute, so a rule with an open delay acts a minute or more after the threshold is crossed. Set the threshold with that margin.
The same loads can also be sold to the grid through an aggregator. The ZDR demand response controller combines metering with a local response to grid frequency, through a relay for a load or generator, or a set point for a battery or UPS. A virtual power plant is built from these actions, and the demand response solution shows the full system.
Common questions
What is the difference between peak shaving and load shifting?
Peak shaving reduces the maximum interval demand of a site, to cut demand or capacity charges or to stay under the connection limit. Load shifting moves consumption from one period to another, to use cheaper energy. Moving a process out of the peak does both. Running a battery at the peak shaves the peak and does not change when the process runs.
How does a battery do peak shaving?
The controller holds site import at a threshold. When demand rises above it, the battery discharges behind the meter to supply the difference. The battery needs enough power for the largest excess and enough energy for the area of the load above the threshold over the longest expected peak. It recharges later, at a time when the recharge power plus the site load stays under the threshold.
Does peak shaving save energy?
Not by itself. It reduces the highest demand. A battery adds conversion losses, so total energy rises by roughly 10% of the energy it shifts. A load that is shed and not needed later, such as lighting in an empty area, does save energy.