As the cost and demand for energy increases, large businesses are increasingly adopting demand control strategies to help reduce costs by limiting the amount of power drawn from the electricity grid at any one time. Enterprise energy management (EEM) systems can help make this process more efficient and effective in reducing costs.

How Demand Affects Your Bill

All businesses are charged for energy consumption, the actual kWh used in a given billing period. For commercial and industrial energy consumers, another parameter is added to the total charged: the customer's highest level of energy usage, or peak demand. This additional parameter acts as a capacity charge, paying for the infrastructure required by the utility to deliver the peak demand level.

These additional charges typically account for about 25% of a utility bill. Demand control allows businesses to minimize these demand peaks and regulate power usage across their entire enterprise, reducing extra demand charges and lowering long-term energy costs.

Demand charges can be calculated in a number of ways, depending on the utility tariff document -- a formal document filed and approved by the Public Utilities Commission or similar agency for the region. The calculations can involve:

• peak demand during the previous month


• average usage over a set period of months


• seasonal variations


• time-of-day variations


• ratchet charges.

For example, a business located in a warm-weather region might have their demand charge set by an average of their usage over the summer months, when usage is typically highest. There may also be additional charges per kW for usage during peak time-of-day hours (for example, 9 a.m. to 5 p.m.).

With ratchet clauses, the minimum demand charge is set using one or more of the elements outlined above; this minimum charge is the least amount paid, regardless of actual energy consumption during the billing period. Levels are constructed above this minimum level, so that if usage exceeds a given level, there are additional charges. These charges increase as the peak demand level increases. Thus, if a business has uneven power usage with just one excessive demand peak, demand charges can account for even more than 25% of their utility costs.

Using EEM to Profile and Control Demand

Reducing the demand portion of a facility's utility bill requires an understanding of the various components that make up the peak demand. The first step in understanding demand is to develop an enterprise-wide load profile.

This can be accomplished most cost-effectively with the help of an EEM system. Revenue-accurate intelligent energy meters are installed on the main service entrances to the facility to measure usage across a series of 15-minute energy measurement windows, Energy usage is measured in kWh and instantaneous kW is averaged to obtain demand levels.

Additional energy meters can be used to submeter individual feeds, production lines, or equipment, to determine the coincidental demands that result in the overall peak facility demands.

An EEM software application is then used to collate the information provided by each meter, help analyze the data, and assemble an accurate load profile.

As load profile information is received, the EEM system compares the average power usage for each 15-minute interval to the threshold (maximum usage level) set by the operator. Operators will generally set their demand usage thresholds lower than the actual utility threshold to ensure that the utility threshold is never crossed (because crossing it means a significant increase in costs).

When demand information is available for comparison to the utility's threshold, the operator can take action to reduce the demand from the utility before the threshold is reached. This reduces their highest level of demand, through a procedure called "peak shaving." Because customers pay a tariff based on their maximum power usage level, lowering the peak can significantly lower total energy costs. (Figure 1, below: Peak shaving reallocates tasks from peak usage time to lower-usage time, decreasing overall demand charges.)

A number of peak-shaving methods are available to consumers, including load scheduling, turning on onsite generation, and load shedding (shutting of selected loads or processes).

Method 1: Scheduling Loads

Load scheduling involves organizing processes into a set schedule so as not to exceed a demand threshold. This is accomplished by collecting metered energy data over a period of time (day-ahead, weeks, months or years), and using an EEM system to analyze it for peaks and lows, compare it to business processes, and match energy costs (including demand) to these processes. The business processes can then be rearranged to create a lower overall demand profile. However, this approach is only feasible when energy usage occurs in a relatively consistent pattern across a set period of time. For example, a manufacturing plant could schedule production line startups at different times of the day to avoid having all lines starting and running at the same time. (Figure 2, left: By scheduling non-time-sensitive loads to run sequentially rather than concurrently, total demand at any given time can be reduced, which in turn reduces demand penalties.)

For businesses with less consistent usage, load scheduling could be enabled through the use of lockouts. The EEM system is programmed to allow only a specific number and/or combination of loads to be provided power at any given time. Any combination of loads can be activated, but once the maximum load level is reached, a request to add any additional load that contravenes the programmed demand limit is ignored.

Method 2: Generating Electricity

Another form of peak shaving is generation. A plant or facility sets up an auxiliary on-site generator that can be started (either automatically or manually) when power usage approaches the maximum usage threshold. Because it supplements the available power, it does not necessarily require decisions about load usage or timing, as is the case with load scheduling and load shedding. However, it does require decisions based on economic considerations, such as the cost of fuel for the generator vs the cost of a higher demand charge.

When the EEM system detects a situation that requires supplementary power, it sends a message that the generator needs to be turned on.

With the generator on, the power flows from the generator through an interconnection point, which synchronizes the two power sources (utility feed and generator), then directs it out to loads requiring power. The EEM system monitors the demand level on the utility power supply. Once demand drops significantly below the threshold level, the software sends a notification to turn the generator off.

Method 3: Shedding Loads

As with generator control, in load shedding, the EEM system monitors the demand level and compares it to a set (programmed) maximum level.

When demand levels approach the maximum usage limit, the system can automatically turn off non-critical systems, using a preset matrix to determine which loads are disposable at the given time. When the usage level declines, the loads are brought back online. These actions can also be handled manually by an operator responding to alarms generated by the EEM system.

When the EEM system detects a power usage level that must be curtailed, it decides which loads to shed, based on complex algorithms that account for time and conditions of various loads. For example, an air conditioning system might be an expendable load, but only when temperatures within the facility are below a certain point.

In a typical EEM system, some intelligent meters feature integrated relay control outputs. When the EEM software decides to curtail load, it sends commands to individual meters which, in turn, shed the loads. In some cases, the plant may have an existing demand control system (DCS) in place. If so, the EEM system can alert an operator to a load curtailment condition and the operator can manually use the DCS to shed loads.

Summary

Energy costs represent a significant amount of the operations costs for many large commercial and industrial customers, and demand charges can make up a large portion of this expenditure. An energy management system is an effective way to minimize demand charges by actively managing and scheduling loads and generation to flatten the overall load profile.