What Is Peak Shaving and How Does Battery Energy Storage Work?

BATTERY PEAK SHAVING GUIDE

Battery peak shaving uses a battery energy storage system to supply part of a facility's electricity demand when power consumption rises above a selected level. Instead of drawing the entire peak load from the utility grid, the BESS discharges during high-demand periods and helps reduce the facility's grid demand.

For commercial and industrial facilities, BESS peak shaving can be useful when electrical loads vary significantly during the day, when short periods of high demand occur, or when a site needs greater control over how much power it draws from the grid at one time.

If you are not familiar with the basic structure of battery storage, first read our guide on what a commercial energy storage system is and how it works . It explains the roles of the battery, PCS, BMS and EMS before moving into specific operating strategies such as peak shaving.

What Is Peak Shaving?

Electricity demand in a commercial or industrial facility is rarely constant. A factory may have several production machines starting at the same time. A warehouse may experience high refrigeration demand. A commercial building may reach its highest load when HVAC, lighting and other equipment operate simultaneously.

These short periods of high power demand are known as demand peaks.

Peak shaving is an energy management strategy used to reduce the highest level of power drawn from the grid. Instead of allowing grid demand to rise with the full facility load, another power source temporarily supplies part of that demand.

With battery storage, that additional power comes from the BESS.

How Does BESS Peak Shaving Work?

A battery energy storage system can continuously monitor the site's electricity demand through the EMS or related control system.

A simplified peak-shaving sequence works like this:

A Simple Battery Peak Shaving Example

Consider a facility with the following demand profile:

• Normal facility demand: 80kW
• Temporary peak demand: 140kW
• Desired grid-demand limit: 100kW
• Peak duration: 1.5 hours

The battery would need to supply approximately:

If the additional 40kW is required for approximately 1.5 hours:

This simplified example shows why peak shaving involves both power and energy. The BESS must provide enough kW to reduce the demand peak and enough kWh to maintain that output for the required period.

Actual system sizing should also consider usable battery capacity, system efficiency, reserve requirements, battery state of charge and other project-specific operating conditions.

During peak shaving, the BESS supplies part of the facility load to keep grid demand below a selected target.

Why kW Matters in Battery Peak Shaving

For peak shaving applications, the required discharge power is especially important.

If the facility reaches 150kW and the project aims to limit grid demand to 100kW, the BESS may need to provide approximately 50kW during the peak.

A battery with a large energy capacity does not automatically solve this requirement if the PCS cannot deliver enough power.

Why kWh Matters in BESS Peak Shaving

Power determines how much of the peak the system can reduce, but energy capacity determines how long the battery can continue doing it.

For example:

This is why the duration and frequency of demand peaks must be known before selecting a commercial battery storage system.

What Data Is Needed for a Peak Shaving Project?

Accurate demand peak reduction planning requires more information than the facility's monthly electricity consumption.

Useful project data includes:

• 15-minute, 30-minute or hourly load profile
• Maximum recorded demand in kW
• Normal operating load
• Duration of demand peaks
• Number of peak events per day
• Daily electricity consumption
• Operating schedule
• Existing transformer capacity
• Solar PV capacity, if applicable
• Generator capacity, if applicable
• Available BESS charging window

For many C&I projects, the load profile is more useful than a single electricity-consumption figure because it shows exactly when peak demand occurs and how long it lasts.

Peak Shaving vs Load Shifting

Peak shaving and load shifting are related but they are not exactly the same operating strategy.

A commercial BESS may perform both strategies depending on the EMS settings, tariff structure and project objectives.

How the EMS Controls Battery Peak Shaving

In an integrated commercial battery storage system, the energy management system can monitor facility demand and control battery charging and discharging according to configured operating limits.

For example, the EMS may be configured to maintain grid demand below a selected level. When the measured load approaches that threshold, the system can command the PCS to discharge the battery.

When facility demand falls again, battery discharge can be reduced or stopped. The system can then recharge according to the available charging schedule.

The actual control strategy should also protect the battery's required state-of-charge reserve, particularly when the same BESS is expected to provide backup power.

The EMS can monitor facility demand and control BESS discharge when grid power approaches a configured threshold.

Commercial BESS Options for Peak Shaving Projects

The correct BESS depends on the amount of peak power that needs to be reduced and how long each peak event lasts. Different battery and PCS combinations can therefore suit different commercial and industrial load profiles.

Browse additional commercial battery energy storage systems for different power and capacity requirements.

Peak Shaving With Solar PV

Peak shaving can also operate together with a commercial solar PV system.

During periods of strong solar generation, part of the facility load may already be supplied directly by PV. If facility demand later increases or solar output decreases, the BESS can provide additional power according to the configured operating strategy.

The battery charging schedule should consider both available solar energy and the expected timing of future demand peaks.

Can Peak Shaving Reduce Transformer Loading?

In some projects, a BESS can reduce the amount of power drawn through the grid connection during periods of high facility demand.

However, transformer loading, electrical protection, short-circuit requirements and site electrical design must be evaluated by the project engineer. Battery storage should not be treated as a substitute for proper electrical-system design.

Common Peak Shaving Design Mistakes

Using Monthly Consumption Instead of a Load Profile

Monthly kWh data does not show when the facility reaches its highest demand or how long those peaks last.

Selecting Battery Capacity Without Checking PCS Power

Peak shaving often requires significant power for relatively short periods. The PCS must be able to supply the required peak-reduction power.

Ignoring Peak Duration

A 50kW demand peak lasting 10 minutes requires much less stored energy than a 50kW peak lasting three hours.

Using Too Much Battery Energy Before the Peak Period

If the BESS performs several functions, the control strategy should maintain enough available state of charge for expected peak-demand events.

Ignoring Available Charging Time

A battery that discharges repeatedly must also have sufficient power and time available for recharging.

Frequently Asked Questions

1.What is battery peak shaving?

Battery peak shaving is the use of stored battery energy to supply part of a facility's load during high-demand periods, reducing the amount of instantaneous power drawn from the grid.

2.How do you calculate battery size for peak shaving?

First calculate the required peak-reduction power by subtracting the desired grid-demand limit from the facility peak load. Then multiply the required BESS power by the expected peak duration to estimate the theoretical energy requirement. Usable battery capacity, efficiency and reserve requirements should then be considered.

3.Does peak shaving require a large battery?

Not necessarily. Battery size depends on both the amount of power that must be reduced and the length of the peak period. Short, high-power peaks may require substantial PCS power but comparatively less battery energy.

4.Can solar batteries be used for peak shaving?

Yes. A commercial battery storage system can work with solar PV and use stored energy to support the facility during periods of high demand, provided the system is designed and controlled for this operating strategy.

5.Can the same BESS provide peak shaving and backup power?

It can in appropriately designed systems, but the operating strategy must preserve sufficient battery state of charge for backup requirements while also managing peak-demand events.

Effective Peak Shaving Starts With the Load Profile

A successful battery peak shaving project starts by understanding when the facility reaches its highest demand, how much power needs to be reduced and how long each peak lasts.

The BESS then needs enough PCS power to supply the required demand reduction and enough usable battery capacity to maintain that output for the necessary duration.

For commercial and industrial projects, Voltertech provides liquid-cooled battery energy storage configurations with different kW and kWh combinations for peak management, solar energy storage, backup power and other C&I applications.