Understanding Electric Demand
Have you ever wondered why your business's electricity bill seems so high, even when your total energy use hasn't changed much? The answer often lies in a powerful, hidden cost called electric demand. It's the silent factor that can drastically increase your expenses, strain the power grid, and impact our environment. Understanding and managing this concept is key to unlocking significant savings and contributing to a more sustainable future.
What is Electric Demand?
In the world of electricity, two terms are often used: energy consumption and electric demand. While they are related, they represent very different concepts.
Energy Consumption (kWh): This is the total amount of electricity you use over a period of time, like a month. It’s measured in kilowatt-hours (kWh) and is similar to the total gallons of gasoline you use to drive your car.
Electric Demand (kW): This is the rate at which you consume electricity at any given moment. It’s measured in kilowatts (kW) and is like the speed at which you are driving. For businesses, utilities often measure demand based on the highest usage over a short period, typically 15- or 30-minute intervals, during the billing cycle. This peak is what drives the demand charge on your bill.
Why Reducing Demand is a Game-Changer
Reducing your electric demand is not just about saving money; it has a profound positive impact on your business, the electric grid, and the environment.
1. From a Bill Perspective: Reduce Your Operational Costs
For many commercial and industrial customers, demand charges can account for a significant portion of their electricity bill, often ranging from 30% to 50%. A single, brief spike in your electric usage can lock in a high demand charge that you pay for the entire month. By actively managing and lowering these peaks, you can achieve substantial, direct savings.
For example, DemandQ's Intelligent Demand Optimization has helped:
A national retailer reduce its overall demand by 8.2%, leading to over $3.1 million in savings.
A quick-service restaurant cut its monthly bill by over 10%
A nationwide banking client achieve energy cost savings greater than 11%.
2. From a Grid Perspective: Enhance Reliability and Stability
The electric grid is a carefully balanced system where supply must constantly meet demand. To handle the brief but intense peaks in demand, utilities must have enough generation and transmission capacity to meet everyone's needs at the same time.
When demand spikes unexpectedly, especially during heatwaves when everyone is running their air conditioning, the grid can become strained, increasing the risk of brownouts or blackouts. By reducing peak demand, you help:
Lower strain on the grid: You reduce the overall stress on power plants, substations, and transmission lines, which helps prevent failures and ensures a more reliable power supply for everyone.
Defer infrastructure investment: By flattening the demand curve, you decrease the need for utilities to build new power plants or upgrade costly infrastructure, which ultimately helps to stabilize electricity rates for all consumers.
3. From a Climate Perspective: Promote Sustainability
Electric demand directly impacts our planet's health. During peak periods, utilities often rely on "peaker" power plants to meet the high demand. These plants are typically older, less efficient, and often powered by fossil fuels like natural gas or diesel, making them a significant source of carbon emissions and air pollution.
By reducing demand, you help to:
Lower greenhouse gas emissions: You decrease the need for these high-emission peaker plants to fire up, which reduces the overall carbon footprint of your operations.
Support renewable energy: A stable and flexible grid, one with fewer drastic demand spikes, can more easily integrate intermittent renewable energy sources like wind and solar power. This is because demand can be aligned with when these sources are most available, making the entire energy system more efficient and cleaner.
In short, reducing electric demand is a win-win-win: it lowers costs for your business, strengthens the electric grid, and contributes to a more sustainable future for everyone.
How DemandQ Helps
DemandQ uses its patented technology to optimize how buildings access power from the electric grid. Our cloud-based, AI-driven systems seamlessly integrate with a building’s existing control systems to manage and orchestrate the energy use of various equipment.
Instead of turning off equipment to save energy, which can impact comfort and operations, DemandQ’s Intelligent Demand Optimization focuses on redistributing the timing of energy use. Our algorithms analyze real-time data to identify when and where energy spikes are occurring. This allows us to make small, undetectable adjustments to the timing of power-intensive loads, like air conditioning units or refrigeration systems, to prevent multiple units from turning on at the exact same moment. This process, known as peak shaving, effectively flattens the demand curve without compromising comfort or operations.
Our solution also provides additional benefits, such as:
Price Mitigation: For customers in deregulated markets, our system can monitor real-time energy prices and automatically reduce consumption when prices are at their highest, protecting against market volatility.
Automated Demand Response (ADR): We enable businesses to automatically participate in utility demand response programs, helping them earn revenue by intelligently reducing load when the grid is under stress. This is all done without any manual intervention.
In short, reducing electric demand is a win-win-win: it lowers costs for your business, strengthens the electric grid, and contributes to a more sustainable future for everyone.