Have you ever wondered why your business electricity bill seems far more expensive higher than that of a large household, even when usage looks similar? Many business owners are surprised by the extra charges, and the hidden factor is something called Peak Demand Charge. Understanding this cost is the first step to lowering your long-term energy expenses.
What Is Peak Demand Charge?
Peak Demand Charge is an additional fee imposed on businesses and industrial facilities, calculated based on their highest electricity usage during a specific time period. Key principles include:
- Maximum 15-minute average in a month – Utilities measure electricity use every 15 minutes and record the highest value each month for billing.
- Charged in kilowatts (kW), not kilowatt-hours (kWh) – kW measures instantaneous demand (power at a moment), while kWh measures total energy used over time.
- Added on top of normal electricity usage – The maximum demand value recorded over 12 months influences charges, meaning costs remain high for an extended period.
- Applies under TOU (Time of Use) rates – Medium- and large-scale businesses are charged differently based on On-Peak and Off-Peak hours.
Why Does Peak Demand Make Electricity So Expensive?
Utilities must maintain generation capacity to meet the highest demand level, not just average usage. This means building power plants and grid infrastructure to handle peak hours—even if those peaks last for only a few hours per day.
Therefore, demand charges are based on the principle: “the higher your peak, the more you pay.” Businesses with high peaks drive higher infrastructure investment, and so they bear higher costs.
Current demand charges are about THB 132.93 per kW Metropolitan Electricity Authority, for medium-sized businesses
Example: A business with a Peak Demand of 100 kW pays an additional THB 13,293 per month, on top of normal electricity charges.
A restaurant running all stoves and air conditioners simultaneously may hit a peak of 50 kW, adding about THB 6,647 per month in demand charges.
How to Reduce Peak Demand and Save on Electricity
Effective Peak Demand management can significantly lower monthly bills. Common strategies include:
- Load Shifting – Move high-energy equipment (e.g., large air conditioners, heavy machinery) to Off-Peak hours when rates are cheaper.
- Load Staggering – Avoid turning on all equipment at once. Instead, stagger operations by floor, department, or zone to prevent peak surges.
- Energy Efficiency – Upgrade to energy-efficient equipment such as LED lighting, high-performance motors, or Grade 5-rated air conditioners.
- Smart Control Systems – Install intelligent controls that monitor electricity use in real time and automatically reduce loads before peaks occur.
Banpu NEXT: Smart Solutions to Cut Peak Demand Costs
Banpu NEXT provides end-to-end energy solutions designed to address high electricity bills caused by Peak Demand.
- Solar + Battery Systems – Combine solar power with storage for 24/7 clean energy supply, especially valuable during peak hours.
- Smart Chiller Systems – AI-driven cooling systems optimize operation schedules,preventing simultaneous load spikes while maintaining comfort.
- Digital Platforms – A real-time energy monitoring system that enables system managers to analyze electricity usage patterns and easily identify periods of high consumption that cause Peak Demand. The platform presents data in clear graphs and reports, helping decision-makers act with greater efficiency.
These solutions not only lower Peak Demand Charges but also enhance overall energy efficiency, reduce carbon emissions, and support organizational sustainability goals.
Analyze and Manage Peak Demand with Banpu NEXT
Banpu NEXT helps businesses monitor electricity usage, analyze Peak Demand behavior, and implement tailored Net Zero Solutions to cut costs and drive sustainability.
Start optimizing your energy use today with Banpu NEXT’s expert solutions.
References:
- ประเภทที่ 3 กิจการขนาดกลาง – การไฟฟ้านครหลวง
- ทำอย่างไรให้ได้ประโยชน์จากอัตราค่าไฟฟ้าแบบ TOU – EPPO
- Reducing Peak Demand Charges: A Smarter Approach to EV Charging
- 4 Peak Demand Reduction Strategies
- The demand charge, and how to reduce it
- Load Shifting: What Is It and How Does It Work?
- EPRI – Understanding Electric Utility Customers – What You Need to Know About Peak Demand
- U.S. Department of Energy – Demand Response
