Since a few years ago, the cost of electricity has been steadily growing, and additional rate hikes are expected in the future. If you have ever had an opportunity to examine the costs of utilities, you have realized that consumption and demand fees make up more than half of your overall cost.
Demand charges frequently make up close to half of the overall cost, and in some situations, they may even be more than consumption charges. It is therefore a good idea to comprehend how each of these billing factors are computed so that you may choose the most effective means of limiting both and saving yourself or your company some money.
Consumption of energy
Your energy consumption fee is generally pretty simple to comprehend and figure out.
Kilowatt hours, or kWh, are used to measure consumption. This calculates how much energy you used over the billing cycle. Prices for kWh vary greatly. You can spend just as $0.03 per kWh or equally for $0.30 each kWh or more, depending on your region and energy rate plan.
By carefully controlling your HVAC system to prevent over-air conditioning, overheating sections in your building, and cooling the ambient temperature when buildings are vacant, you may reduce the number of kWh you use, for example.
By making certain that power-hungry devices like lights, computers, exhaust fans, cell phone chargers, and kitchen appliances are only turned on when necessary, you may further reduce your use. Bear in mind that energy costs change by the minute, so what may cost .05 to operate for a minute today, may cost .50 to operate for a minute tomorrow.
This is due to the price of creating and storing electricity. Depending on the price the electricity was stored at, it could cost you more to operate a device than it did yesterday. Typically, electric utility companies offer a baseline rate to avoid rate spikes due to ever-changing prices.
Demand is a trickier topic. Demand is the total quantity of electrical energy that must be produced at any particular time, according to the electric utility. In simple terms, the provider must be able to provide the maximum quantity of power required by every single one of its customers at any point during the day.
More sources of energy must be discovered as demand rises, which can be quite expensive. The utility’s customer base often pays for such expenses. Demand, in the eyes of the consumer, is a measure of how quickly and effectively energy is consumed.
The unit of measurement for electrical power consumption is kW. This is the unit which will be part of the equation on your bill.
As the lighting, HVAC, and other loads come on and go, your demand will change. The electricity provider often calculates demand as the average amount of power you use over a 15-minute period. Very brief demand spikes, like those that happen when electric motors start up, will not have much of an impact on the 15-minute average demand.
However, prolonged demand will undoubtedly have a significant effect. For instance, your dagens strømpris will be higher because the 15-minute demand will be significantly affected if you continuously run a powerful electric motor, such as a kitchen exhaust fan.
The cost of demand per unit is almost always substantially higher than the cost of consumption per unit. Usually, a couple of cents per kWh are charged for consumption.
Typically, a few to multiple dollars per kW are charged for demand.
The power factor is another component that may have an impact on your demand charge. How effectively your site consumes electrical energy is determined by its power factor. If your equipment has a high power factor, which is caused by inefficient energy consumption, the electric company will need to have additional generation capacity available to meet your needs.
You can usually find the energy factor measurement on your electric bills. A percentage is used to represent the power factor. Your bill will go up if your residence uses power at low power factors.
Finally, you might also notice actual demand along with billing demand on your bill, which are two distinct types of demands.
The highest true average 15-minute demand that was recorded during this billing period is what is meant by “actual demand,” as the name suggests. The demand for billing is equal to the peak 15-minute demand recorded at your location in prior months.
You might be charged the greater of these two sums each month. The Demand Ratchet is a component used in bills that combine real and billing demand.
The one and only exemption to this rule could be if your real demand at a subsequent month, for example, August in Miami, was higher than the demand for July. In that case, the consumer demand which would be billed could boost to that greater quantity for August and be utilized as the billing customer demand for the subsequent 11 months, regardless of your actual demand once more.
Your greatest demand will be locked in for 12 months if your rate contains a demand ratchet, though some utilities utilize six months, another use a period of 18 months, but many ratchet plans utilize 12 months. It is constantly a good idea to control your demand. When you have to deal with a demand ratchet, managing your demand is essential.
A Good Energy Management System
The majority of systems for energy management can assist you in lowering your electric usage.
However, your EMS will not be able to assist you in managing your demand costs if you do not know precisely where and when the energy is being used or how efficiently it is being used. This could possibly be because you are not metering the primary strain and submetering significant electricity-consuming equipment at your facility.
The first and most important step in any attempt to reduce power demand, energy consumption, and annual electric costs is to understand where, why and how efficiently electricity is being used at each site. An energy management system provides advanced software, expert services, and hardware to handle energy-consuming devices for autonomous power management.