Photo courtesy of Flikr userTravis Wise "Twin Peaks"

We turn to Gridium customer data to explore if a building's peak demand is related to the grid's peak demand

Gridium customers have long been at the vanguard of demand management, using our predictive demand forecasts to react to demand charges comprising up to 40% of total bill amounts. As the grid adapts to more renewables, utilities are also increasingly in managing their demand, whether through expanded demand response programs or by investments in energy storage, such as SCE’s massive 250MW program.

Sounds like exactly the same thing, right?

We wanted to know. Is a building’s peak demand the same thing as a utility’s peak demand? The results were surprising to us, and show that building demand management is quite distinct from grid management.

Using our playground for data science, Gridium Labs, we pulled a sample of about 500 buildings we service in PG&E territory. We tabulated their billing peaks, and compared them to demand response days from PG&E throughout its six month summer season:

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Rarely do buildings peak on the same day as the utility grid. Y Axis shows number of months in which a building and the utility share a peak demand day.

As you can see, the relationship is not very common. 17% of buildings never peak with the grid. A massive 79% of buildings peak alongside the grid just a third or less of the time. Not a single building in our data set has a coincident peak either 5 or 6 months out of the year.

What does this mean for building managers?

First, it highlights that managing the demand charges on your bill is a very different activity than assisting the utility with their demand peak. Put simply, demand response, price response, and utility funded energy storage are completely different opportunities for your building. Enrollment in a utility demand program doesn’t do anything for your own demand charges, currently in the $35/kW range in California!

Second, for those exploring energy storage, it means that accurate and timely dispatch of the battery system against billing demand charges are the critical element for your financial return. You can’t install the battery and assume that the utility has your best interests in mind. To fully capture the value, your battery should be sized, optimized and dispatched to handle both your peak demand as well as the utility’s.

About Tom Arnold

Tom Arnold is co-founder and CEO of Gridium. Prior to Gridium, Tom Arnold was the Vice President of Energy Efficiency at EnerNOC, and cofounder at TerraPass. Tom has an MBA from the Wharton School of Business at the University of Pennsylvania and a BA in Economics from Dartmouth College. When he isn't thinking about the future of buildings, he enjoys riding his bike and chasing after his two daughters.

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