Peak Shaving with Battery Storage Systems – Reducing Load Peaks and Saving Costs
In commerce and industry, electricity costs are not only determined by the kilowatt-hours consumed. Often, the highest power drawn also plays a significant role. This is precisely where peak shaving comes in: a battery storage system provides additional power during short peak times, preventing unnecessary high grid consumption.
For companies, this can be very economically attractive. Because if load peaks determine the demand charge, a storage system can help to specifically cut these peaks. Especially with machine starts, cooling, charging infrastructure, production, or highly fluctuating load profiles, peak shaving becomes an important component of modern energy planning.
Key Takeaways
- Peak shaving means deliberately reducing load peaks: The battery storage system provides power when grid consumption briefly becomes too high.
- Demand charges can be a major cost factor in commercial settings: Often, not only consumption but also the highest measured power is counted.
- Battery storage systems are particularly well suited for short, recurring peaks: for example, with machines, cooling, compressors, charging points, or production processes.
- Profitability strongly depends on the load profile: What matters is not just the storage capacity, but above all the available power at the right time.
- Practical tip: Before designing, the load profile should always be analyzed – ideally with measurement data from operation.
1) What is Peak Shaving?
Peak shaving literally means "cutting off peaks". This refers to the targeted reduction of power peaks in electricity consumption. Whenever a company briefly needs particularly high power, the battery storage system provides support.
The goal is not to replace the company's entire electricity consumption. Rather, it's about avoiding expensive short-term peaks. This smooths out grid consumption, and the highest measured power remains lower.
Peak shaving does not automatically reduce every kilowatt-hour of electricity consumption. It primarily reduces the maximum power a company draws from the grid.
2) Demand Charges Simply Explained
Many commercial and industrial customers not only pay an energy charge per kilowatt-hour consumed. An additional demand charge may also apply. This is often based on the highest measured power within a billing period.
A simplified example: A company consumes electricity throughout the month for production, office, cooling, and charging infrastructure. However, the highest power peak, which occurs only briefly – for example, when several machines start simultaneously or multiple vehicles are charged in parallel – can be decisive for the demand charge.
✓ Energy Charge kWh
- Refers to the amount of energy consumed.
- Billed based on actual electricity consumption.
- Unit usually cents per kWh.
! Demand Charge kW
- Refers to the highest power drawn.
- Strongly influenced by load peaks.
- Unit usually euros per kW and year or billing period.
The higher the measured peak, the higher the demand charge can be. This is precisely why peak shaving is particularly worthwhile for companies that draw high power only for short periods but repeat these peaks regularly.
3) How Battery Storage Systems Reduce Load Peaks
A battery storage system is controlled to provide power at critical moments. If the operation exceeds a defined power limit, the storage system automatically discharges. As a result, a portion of the power is not drawn from the grid but supplied by the battery.
After the load peak, the storage system can be recharged – for example, from the PV system, during times of lower grid consumption, or during favorable tariff periods. This creates a significantly smoother load profile.
Before Peak Shaving
without storage- Short peaks fully impact grid consumption.
- The highest power determines the demand charge.
- The company pays for peaks that often occur only briefly.
With Peak Shaving
with storage- The storage system provides power during peak times.
- Grid consumption remains below a defined limit.
- Power costs can be better controlled.
With PV and Storage
combined- PV electricity can be used to charge the storage system.
- Self-consumption and peak shaving work together.
- The energy system becomes more flexible and economical.
4) When Peak Shaving Becomes Economically Attractive
Peak shaving is particularly worthwhile when load peaks occur regularly and cause relevant demand charges. What is decisive is not only how high the peak is, but also how long it lasts and how often it occurs.
A storage system is particularly strong when high power is needed only for a short time. Then, a larger grid connection does not have to be continuously used or paid for. Instead, the storage system buffers the short power peaks.
Peak shaving should always be planned with real load data. A 15-minute power measurement usually shows very quickly whether a storage system can be economically attractive.
5) Practical Examples from Commerce and Industry
In practice, there are many applications where peak shaving with battery storage systems can be useful.
Commercial Buildings
Office & Operations- Air conditioning, ventilation, IT, and lighting start simultaneously.
- PV generation and loads do not always match perfectly.
- The storage system smooths grid consumption and increases self-consumption.
Industry and Production
Machine Loads- Machine starts generate short-term power peaks.
- Compressors, pumps, or systems do not always run uniformly.
- The storage system provides power precisely at these moments.
Logistics and Charging Infrastructure
E-Mobility- Multiple charging points can heavily burden the grid connection.
- Forklifts, transporters, or company vehicles often charge within similar timeframes.
- The storage system buffers charging power and reduces grid peaks.
6) Technical Requirements for the Storage System
For peak shaving, not only capacity in kWh is crucial. Power in kW is very important. The storage system must be able to detect the load peak quickly enough and provide sufficient power.
In addition, appropriate control is needed. It monitors grid consumption and decides when the storage system discharges or charges. In modern commercial storage systems, this logic is part of the energy management system.
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1
Design power in kW to match the expected peak load.
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2
Select capacity in kWh so that typical peaks are reliably bridged.
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3
Plan energy management so that charging and discharging occur automatically and economically.
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4
Consider the PV system, grid connection, load profile, and storage system together.
7) Typical Planning Mistakes
✕ Common Mistakes
- Only considering storage capacity and forgetting about power.
- Planning without real load data.
- Not evaluating peak shaving and self-consumption together.
- Sizing the storage system too large or too small for the actual load profile.
✓ Better Approach
- Analyze load profiles and identify peaks.
- Design power, capacity, and control appropriately.
- Consider PV, grid consumption, tariff model, and storage strategy together.
- Plan commercial storage as a system solution, not as a single device.
8) Frequently Asked Questions (FAQ)
What does peak shaving with battery storage systems mean?
Peak shaving means that a battery storage system absorbs short-term load peaks. This reduces the amount of power drawn from the grid, and the demand charge can decrease.
What are demand charges?
Demand charges refer to the highest power drawn within a billing period. They apply to many commercial and industrial customers in addition to the energy charge for consumed kilowatt-hours.
For which businesses is peak shaving interesting?
Peak shaving is particularly interesting for businesses with short, recurring load peaks. This includes production, logistics, cooling, charging infrastructure, workshops, and many commercial buildings.
Is storage power or capacity more important for peak shaving?
Both are important. For cutting load peaks, power in kW is particularly crucial. Capacity in kWh determines how long the storage system can provide this power.
9) Conclusion
Peak shaving with battery storage systems is an effective approach to reduce load peaks and better control demand charges.
Especially in commercial and industrial settings, a storage system can become economically attractive when high power is needed only for short periods. Instead of drawing these peaks entirely from the grid, the storage system provides additional energy at the right moment.
Crucial for a good solution are accurate load data, appropriate storage power, and intelligent energy management. Then, the battery storage system becomes not just an energy storage device, but an active tool for cost optimization.