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Peak Demand Charge & Block Rate based on Billing Demand

Hello

I read Help and Wiki documents of 'Scenario Energy Cost', but Because my specialism is not electricity, need more explanation about:

1- What is 'Peak Demand Charge'? Assume that a 33kw demand for a pump is purchased from local Electricity Board, but that pump is a 38kw one. Does 'Peak Demand Charge' mean the difference of what purchased and what used? As I think 'Peak Demand Charge' in my example will be 5kw. Am I right?

2- What is 'kwh per kw' unit? It is used in ' Block Rate based on Billing Demand ' tariff. It seems to be remained just 'h' in it (kw removes by kw from numerator and denominator). Does it mean counted hours of using demand? For example 300 hours of using demand for one pump and 350 hours using demand for another pump.

Sim

Parents
  • Peak Demand Charge can be defined differently by different power suppliers, but in this case it is taken to be the instantaneous peak energy use within some time frame (as defined by the power supplier), multiplied by a specific charge per kW. Usually it is the literal peak energy consumption, not any difference between values.

    The kWh/kW unit is for tariffs that have a block rate (one that varies in $/kWh based on cumulative consumption), but where that consumption is a function of the billing demand (typically of the previous bill cycle). Since block rates tend to increase in price for each block, having a lower billing demand is relatively advantageous. The numerator is power consumption (energy x time) and the denominator is the energy use of the "billing demand of the previous cycle" so in this case it's not appropriate to cancel units.



  • Wayne

    So sorry, because in spite of your explanation,I could not comprehend what ‘Peak Demand Charge’ is. Would you explain it with a numeral example and a little simple?

    Sim

  • Hello Sim,

    Take a look at Example5.wtg. This has a Scenario Energy Cost already setup. In that case, the Peak Demand Charge is $6.50. This is multiplied by the peak power derived by the program (37.7 kW) to obtain the Peak Power Cost. This is the cost over the entire billing cycle. The daily power power cost can be easily derived from this.

    Thanks,

    Scott

    Answer Verified By: Sushma Choure 

  • Hello

    Scenario Energy Cost made me a little mixed up. especially 'Demand Cost'. I know each user must pay two amounts for using electricity: Energy Cost and Demand Cost:

    Energy Cost is defined as a tariff pattern. I have no problem with it. But about 'Demand Cost', I do not know how it be defined. How can define 'Demand Cost' or 'Demand Charge' in Scenario Energy Cost?

    Can someone explain it for me?

    Sim  

  • It's already explained above.

    "the instantaneous peak energy use within some time frame (as defined by the power supplier), multiplied by a specific charge per kW"

    ~~~~

    I found a reasonable analogy on the web. If you consider that your energy consumption is related to driving your car. Then your energy use is the total distance driven and the peak energy use is your highest speed attained. The demand cost (or peak charge) in this analogy is a cost (rate) as defined by the provider multiplied by the top speed attained during your journey. For the purpose of power consumption the provider may use a short period (say 15 minutes) to work out your peak energy use (top speed in this analogy).


    This is all about the power provider trying to manage the total peak for all customers (which has a direct bearing on their infrastructure and operations). If their customers' demand is more constant it's easier for them to manage.



  • Wayne, Scott

    Finally I found out it. Really really thank you very much.

    Sim

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