Peak demand

Peak demand on an electrical grid is the highest electrical power demand that has occurred over a specified time period (Gönen 2008). Peak demand is typically characterized as annual, daily or seasonal and has the unit of power. Peak demand, peak load or on-peak are terms used in energy demand management describing a period in which electrical power is expected to be provided for a sustained period at a significantly higher than average supply level. Peak demand fluctuations occur on daily, monthly, seasonal, and yearly cycles. For an electric utility company, the actual point of peak demand is a single period that represents the highest point of customer consumption of electricity, typically when a combination of industrial, commercial, and domestic consumers are using heavy heating or cooling loads. The cost of generating and supplying electricity is also typically highest at peak load periods, as more power plants must be operating at high capacity.

Some utilities will charge customers based on their individual peak demand. The highest demand during each month or even a single 15 to 30 minute period of highest use in the previous year may be used to calculate charges. The renewable energy transition will include considerations for peak demand.