The utility must have the capacity to deliver power to all its customers simultaneously. If every customer turns on their heaviest machinery at 9:00 AM on a Tuesday, the grid must be built to withstand that massive surge. Building transformers, substations, and transmission lines to handle these peaks requires massive capital investment.
The simplest, cheapest method. Stagger the start times of large loads. Instead of starting three chillers at 8:00 AM, start one at 7:55, one at 8:05, and one at 8:15. Your MD drops from 300 kW to 100 kW plus baseline.
However, lurking behind the scenes is a more subtle, often misunderstood, and financially devastating parameter: . While kWh measures quantity of energy used, Maximum Demand measures the rate of that usage. And as any facility manager who has opened a commercial electricity bill knows, MD can account for 30–50% of the total charges—sometimes more than the energy itself. maximum demand
Even if a factory only runs at full capacity for 30 minutes a month, the utility must maintain the infrastructure capable of serving that peak load 24/7.
Induction motors are the worst MD offenders. Soft starters limit inrush current to 2–3x rated value instead of 6–8x. Variable Frequency Drives (VFDs) can ramp motors up over minutes, virtually eliminating demand spikes. The utility must have the capacity to deliver
The path forward is clear:
Understanding and managing Maximum Demand can lead to significant cost savings, while ignoring it can result in unnecessarily high penalties. The simplest, cheapest method
In the race to reduce electricity costs, most companies chase the last kilowatt-hour. The smart ones chase the first kilowatt of demand.