Peak Shaving

Peak shaving is the practice of reducing a facility's electricity demand during periods of highest consumption to lower peak-based charges and ease grid stress. It is achieved by curtailing loads, shifting them in time, or discharging on-site generation or storage.

Many industrial electricity tariffs include a demand charge based on the highest power draw in a billing period, not just total energy used. A brief spike can dominate the bill, so trimming those peaks — peak shaving — can cut costs significantly without reducing overall production much.

Methods include temporarily curtailing or rescheduling non-critical loads, ramping flexible equipment, and discharging batteries or running on-site generation when demand approaches the peak threshold. Energy-management systems automate this by forecasting demand and acting before a new peak is set.

Peak shaving overlaps with demand response, where loads are adjusted in coordination with the grid, but its primary driver is reducing the customer's own peak charges. It also helps relieve constrained sites and supports more renewable integration by flattening demand.

Related terms

Demand Response · Energy Management System (EnMS / EMS) · Power Factor