Does Load Shedding Saves Money?

One approach many companies have taken to reduce energy costs is to exercise some form of load shedding. In this case, certain applications are identified as “deferrable” — to run later in the day, after the peak. These applications will vary by region, but common loads include electric hot-water heaters, air conditioners, fans, lighting zones, etc. A company that has demand controllers, will use a normally open, or closed connection to communicate when to do load shedding. The demand controller only does this type of load shedding when it notices that a demand peak is coming.

While many companies pay a flat rate for electricity year-round, the utility’s costs are anything but flat. In a free market, the wholesale price of energy varies widely throughout the day, every day. Demand Response programs such as those enabled by smart grids attempt to give incentives to the companies to limit usage based upon cost concerns. As cost rises during the day in the supply of electricity as the system reaches peak capacity and more expensive “peaking” power generation is used, a free market economy should allow the price to rise. A corresponding drop in demand for the commodity should meet a fall in price. While this works for predictable shortages, many crises develop within seconds due to unforeseen equipment failures. They must be resolved in the same timeframe in order to avoid a Power blackout. Many utilities who are interested in demand response have also expressed an interest in load control capability so that they might be able to operate the “on-off switch” before price updates could be published to the consumers.

Many companies receive incentives from utilities to do load shedding because it reduces the energy load for the utility. Especially during summer months, the utility has to provide constant electrical power to companies and residential homes. However, when shortages occur, blackouts appear and many people are unhappy.

Therefore, if you are a company and are interested in doing load shedding , one company, EG Energy Controls has sophisticated demand controllers that allows you to see reports and demand usage on the internet. You can change demand setpoints and change sheddable loads. You also can see how much money you are saving per month.

How Does the Utility Calculate How Much Load to Shed?

A plant load factor is a measure of average capacity utilization. It is a measure of the output of a power plant compared to the maximum output it could produce.

The two commonest definitions are:

* the ratio of average load to capacity
* the ratio of average load to peak load in a period.

Assuming the first definition, a higher load factor is better:

* A power plant may be less efficient at low load factors.
* A high load factor means fixed costs are spread over more kWh of output.
* A high load factor means greater total output.

Therefore a higher load factor usually means more output and a lower cost per unit, which means an electricity generator can sell more electricity at a higher spark spread.

If the PLF is affected by non-availability of fuel, maintenance shut-down, unplanned break down and no offtake (as consumption pattern fluctuates lower in nights), the generation has to be adjusted. A power (electricity) storage is not feasible. A generation of power is controlled to match the offtake. For any duration, a power plant generates below its full capacity. To that extent it is a capacity loss.

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2 Responses to Does Load Shedding Saves Money?

  1. Pingback: Process of Load Shedding Works | Egenergy's Blog, Energy Conservation, Management

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