One of the major issues in any organisation is the need to increase the bottom line. Increased staffing costs, increased production costs, and increased rent all contribute toreducing the bottom line.

  • What if you could reduce one of your most variable operational expenses: electricity?
  • What if you could reduce the expense of electricity by using an asset that your company already owns?
  • What if by doing this, you also increase the security of your electricity supply – so no more summer blackouts?
  • What if you could make money from your assets, further decreasing operational expenditure?

Demand Management is, as the name sounds, the management of your electricity demand in order to decrease the variability of your electricity bill, so you can control your budgeting and expenses more easily.

This paper outlines Peak Shaving, the most common and effective way to save money, but you can actually make money using power generation equipment you already own. Demand Response, when the electricity operator requests you reduce your electricity use, and you receive financial compensation for this reduction, is the simplest way. There is also another Demand Response method when you actually sell electricity your equipment generates back to the electricity operator – actually making money off equipment you already own. Both of these options are available to certain businesses, but the most common, (and the topic of this paper) is Peak Shaving.

In any business electricity usage goes up and down. A restaurant kitchen gets busy during dinner service, electricity use goes up. A hot day in summer, the air-conditioning runs non-stop, electricity use goes up. A big wedding at a function venue, electricity use goes up.

An electricity retailer calculates your tariff by averaging out the amount of electricity they think you’ll use over a year. They then set a price based on that average. But if you go over the amount of electricity that they think you’ll use, as based on your contract, – a peak in your electricity usage – you will be charged at a much higher rate than your normal contract. Which can be many times the normal rate.

Often a medium to large business will have a backup electricity generator on premises to provide electricity to the organisation in case of a blackout or other disconnection from the mains grid. This generator can be used to generate electricity during times of high demand so the organisation doesn’t go over the contracted threshold that the electricity retailer has allowed for.

An example:

A local hotel runs normal day to day operations connected to the electricity grid. The contract they have with the electricity retailer charges them a standard amount for the electricity they use to power bar fridges, kitchens, air-conditioning, lights etc. However occasionally they hold live music events. These events need lights, speakers, audio equipment, instruments, as well as increasing demands on air-conditioning, bar fridges and kitchens due to more patrons in the venue.

Due to this increase in electricity use, the amount of electricity consumed increases dramatically, pushing the level of consumption over the threshold that the electricity retailer had contracted for, and the venue begins being charged for their electricity at a much higher rate.

However, because the hotel knows that their electricity use goes up during these live music events, and they have a backup generator waiting for a blackout, they turn on their own generator when their electricity use hits the retailer contracted price level, during the live music event, (the blue line in the illustration above). Once the event is over, and the electricity use returns to normal levels, they shut down the generator and return to using the mains electricity as normal.

This is peak shaving – they are literally shaving the peak off the demand from the mains they are using by generating their own electricity using the generator that they already had.

Other examples of the usefulness of peak shaving are:

  • deliveries and/or dispatches at a grocery distribution centre necessitates keeping the fridges open, increasing power consumption
  • increased production at a canning facility due to the seasonality of fruit crops needing to be canned – increasing power consumption
  • a heatwave meaning airconditioning at a shopping centre needs to be running 24/7 – increasing power consumption

Peak Shaving Case Study

The following is case study about a demand response installation in a hotel Adelaide, South Australia.

The hotel was attempting to reduce the cost of their electricity. Like any hotel, the amount of patrons varied significantly throughout the week, and also at different times throughout the year. Which caused their electricity usage to vary, so their electricty bill also varied. Using a demand response and peak shaving system they could place a cap on their electricity costs which enabled them to to get their electricity bill under control, which allowed for more reliable budgeting.

Other benefits were that they were able ensure their electricity supply, monitor and manage their power generation online, and also reduce their environmental footprint.

The hotel installed an array of solar panels across the roof of the hotel, and also a diesel generator which was housed in a sound proof enclosure, (due to the hotel being in a residential area). Combined with a custom designed control and switching system, the hotel was able to combine their own sources of power with the mains electricity supply.

In normal day to day operations, the solar panels supply the hotel with power, along with the mains. When the power demand reaches the contracted amount of 100kw, the diesel generator starts, and the hotel is running completely independently from the mains grid. Once the electricity demand goes back below 100kw, the control system switches the power supply back to the the mains grid. All this happens without any interruption to the hotel’s power – the staff and the patrons never know it has happened.

The diesel generator is also available to provide backup power when a blackout event occurs, important considering Adelaide’s notoriously unstable electricity grid. Because of the way that the system is installed, the backup generator switches on automatically, needing no intervention from staff.

After the installation the hotel’s owners benefitted from a 20% reduction in electricity costs over the first six months.

A Reliable Partner For Your Demand Response Project

In order to use your backup generator for Demand Management, (either for Peak Shaving, or for utility-side Demand Response programs.) your generator’s control system needs to be upgraded to the latest power control products. To make this upgrade as seamless as possible, and to have an industry leading control system installed, ComAp is the only choice.

ComAp’s team of designers, engineers and consultants can work with your business to analyse your electricity usage to find the best solution for your power generation requirements. They can design and install a control system to modify your generator for use in Demand Management and peak shaving.

ComAp’s Demand Management team is based in Adelaide, Australia and are ready to deliver a system that is both cost effective and suitable for the requirements of your organisation.

With offices located around Australia, their team of designers, engineers and installers ensure that your upgrade will be installed quickly and efficiently so you can begin benefitting from Demand Management and peak shaving sooner.

ComAp Australia has been in operation since 1991, and has grown to be the largest of ComAp’s 10 global subsidiaries. ComAp Australia’s team has many years of experience in the power generation industry, and their dedicated Demand Management division will ensure that you end up with the perfect solution for your demand management operation.

Get advice from the Demand Management experts at ComAp today

Marie Pavlik

P: 0448 013 924


Paul Dunn

P: 0437 608 604

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.