For commercial and industrial businesses, electricity costs involve more than the amount of energy consumed. Enterprises such as factories, warehouses, offices, malls, and other large establishments can also be charged for the highest electricity consumption at some point in time during the billing period. Consequently, a brief peak of electricity usage will influence the monthly bill.
The implementation of the Battery Energy Storage System (BESS) is among possible solutions to this problem. Using BESS, one can reduce the reliance on electricity from the electric grid during the peak demand periods through storage and release of the energy in the required moments. In addition, BESS allows us to utilize renewable energy efficiently.
What Is BESS and How Does It Work?
Battery Energy Storage System stores electrical energy for later consumption. Usually, it consists of batteries, a power conversion system, a battery management system, and energy management controls.
Batteries store electrical energy drawn from the grid, solar, or some other suitable energy source. In cases where there is a need for more power in the facility, the system draws out stored energy to meet electrical requirements.
When talking about commercial and industrial applications, the primary advantage lies in flexibility. Instead of being fully dependent on grid energy during peak periods of consumption, a company may take advantage of stored energy. Of course, savings will vary depending on electricity rates, battery capacity, and system performance.
How Does Peak Shaving Reduce Electricity Costs?
The term ‘peak shaving’ refers to a situation whereby the highest electricity consumption level for a particular period at a facility is lowered. This applies to enterprises that use intensive energy-consuming machines, equipment, and HVACs among others.
Suppose an enterprise has many machines working at the same time, which leads to a sudden increase in demand. In such a case, a BESS discharges its energy to meet some of the demand, resulting in reduced power consumed from the electric grid.
In case an enterprise records a peak demand of 500 kW, and a battery delivers 100 kW to the system at that particular moment, then the peak demand will be about 400 kW, provided the system meets its peak demand.
Note that this is just an illustration, and actual results will vary depending on several factors.
Understanding Demand Charges and Potential Savings
Demand charges refer to costs associated with maximum demand recorded for any consumer and are determined using some form of demand-related tariff. The structure of such charges differs among electricity distributors, categories of consumers, and tariffs.
High and/or irregularly changing demand of businesses might be reduced, which would lead to lower costs. However, it is important that the battery should discharge at an appropriate time and for an appropriate period to impact the demand measurement in billing.
Prior to purchasing a battery energy storage system (BESS), it is necessary for businesses to analyze their bills as well as consumption intervals. Determining demand peak periods, their duration, and frequency will help in evaluating whether BESS will bring substantial benefits.
Also, a financial assessment should take into account all expenses related to losses in the battery, charging costs, investments in equipment, maintenance, and battery deterioration.
Combining BESS with Commercial Solar Power
Solar energy and battery storage systems are complementary. The solar power plant on the roof produces electricity, which helps the business consume less power from the utility company. The battery system can store part of the produced solar power for use in case of increased demand or lack of solar power.
Such an option could be helpful for companies with solar power production during the day and demand peak in the evening. But the most effective way of charging would depend on the schedule of operations, the produced solar power, electricity rates, and the battery capacity.
Businesses looking for solar power systems can also examine different models of commercial solar panels. Solar power and battery systems should be examined together and be coordinated in terms of capacities, control, and operation.
Waaree Radiance Solar Kit is a ready-to-install package of solar panels. It is worth remembering that the typical on-grid solar kit doesn’t necessarily have batteries and cannot be used as a backup source during a grid failure.
Which Businesses Can Benefit from BESS?
Battery storage may be worth evaluating for several types of facilities:
- Manufacturing plants: Facilities with heavy machinery and simultaneous equipment start-ups may experience short demand spikes.
- Warehouses and logistics centres: Refrigeration, material handling equipment, lighting, and charging loads can contribute to changing demand.
- Commercial buildings: Offices, malls, and hotels may experience higher electricity demand when cooling and other systems operate together.
- Data centres and critical facilities: Storage can support energy management and, when designed for that purpose, contribute to backup arrangements.
The potential benefits differ by site. Businesses with predictable peaks and suitable tariff structures may have a stronger case for peak shaving than facilities whose demand remains relatively constant.
What Should Businesses Consider Before Installing BESS?
Step one is to analyze electricity consumption to identify those periods during which the peak demand occurs, which will require control.
It depends on the rated capacity of the battery on how many loads it will be able to serve at any one point in time, and the energy capacity will decide how long the battery will serve.
Other parameters that businesses need to look at include round-trip efficiency, life span of the battery, thermal management, fire safety, monitoring, and maintenance needs of the system.
How Waaree Supports Energy Storage Solutions
Battery storage is becoming an important part of energy management for commercial, industrial, and utility-scale applications. Waaree offers energy storage solutions designed to support different power requirements and operational needs.
Businesses can explore Waaree’s energy storage solutions to learn more about its BESS offerings and assess how storage may fit into their energy strategy.
Conclusion
For commercial and industrial facilities, BESS can offer a practical way to manage peak electricity demand and potentially reduce demand-related charges. The results depend on the site’s load profile, tariff structure, battery sizing, and operating strategy, so a detailed assessment is essential before making an investment. By evaluating battery storage alongside solar generation and other energy management measures, businesses can make more informed decisions about controlling electricity costs and improving energy efficiency.
