As energy consumption continues to grow in the United States and around the world, energy providers are trying to balance that demand with the supplies available. Supplies, in this case, refer to power plants, solar farms, wind turbines, hydroelectric plants, and any other source of power to the grid.
Energy companies know that there is a cyclical shift in daily demand for two reasons. First, we humans are diurnal creatures, meaning we are awake during the day and sleep at night. When we go to bed, we usually turn off our electricity-consuming devices, but when we’re awake we’re consuming to our hearts’ content. Secondly, the earth’s rotation causes a daily rise and fall in temperatures because more of the sun’s heating rays hit the earth during mid-day.
As people start using more energy throughout the day, energy companies must meet that demand by increasing output from power plants. Add to that the fact that the warmest temperatures, along with the highest air conditioning needs, occur during the day (especially mid-afternoon) and it can add up to significant demand. Sometimes energy providers even need to fire up dormant plants just to satisfy our thirst for energy.
The phrase peak energy demand often refers to the times during the day in which customers are consuming the most power, typically measured in megawatts (MW). The major problem with peak energy demand is that when demand surpasses supply, energy providers must take steps to reduce demand. This could include brown outs or penalties for excessive use.
How does peak energy demand affect energy bills?
In order to encourage customers to reduce their energy consumption during peak energy times, energy providers have begun to charge higher energy prices during those times. This has been happening in commercial and industrial areas for a while, but now energy providers are starting to use this technique on their residential customers as well.
If your energy provider decides to use a peak pricing plan, they will install a new meter on your home that allows them to track when you are using energy. These special meters are typically known as “smart meters” because they track more data than traditional “dumb” meters which only track total consumption.
Once you have the new meter, your energy provider will be able to charge you based not only on the amount of energy used, but also the time at which you use it. The price for energy during peak hours can often be up to ten times more expensive than during non-peak, or off-peak, times.
“Off-peak” refers to the times during which the least amounts of energy are typically used. When dealing with pricing differences, off-peak times are most often the least expensive times to use energy.
What are peak energy times?
Peak energy times vary by location, but usually coincide the warmest hours of the day. California’s Pacific Gas and Electric Company (PG&E), for example, classifies the time period of noon to 6pm as the peak period. Off-peak occurs from 9:30 PM to 8:30 AM. All other times are considered partial peak. Customers with smart meters will be charged higher prices during the peak and partial peak periods than they will during off-peak times.
If your energy company charges you based on time of energy use, it would be beneficial to find out how they categorize the different time periods. Once you know what times your energy provider classifies as peak, you can begin load shifting.
Load shifting refers to delaying the use of energy during peak times and maximizing the use of off-peak time periods. Doing so will result in lower energy bills.
Some ways that a homeowner can shift their energy load to off-peak hours are:
– Dry laundry in the evening or early morning.
– Cook meals after the peak period, typically after 6PM.
– Use a programmable thermostat to turn off heating and A/C when occupants are away during peak hours.
– Turn off unneeded electrical devices during peak hours.
– Use a timer to ensure battery chargers only come on at night.
– Leave the TV turned off during peak hours.
If you understand the basics of peak energy demand and take small steps to shift the energy demand in your home or business, the result could be significant savings on your energy bill.
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