What is Peak Demand?
Electricity typically gets to your home or office through a massive central system, aka the Grid, broken into three basic components: generation (mostly power plants sited outside the City), transmission lines carrying that power over long distances, and local distribution (stations and wires) to condition and deliver the power.
From an infrastructure planning perspective, the total amount of electricity consumed (kilowatt-hours or kWh) is important, but perhaps more meaningful is the rate of consumption (think of the water pressure in your shower), and the volume of the pipes to support this flow. This energy "bandwidth" is measured in kilowatts or megawatts (kW or MW).
The maximum rate of consumption from the centralized electric grid is called Peak Demand. Peak Demand usually occurs on hot days in the summer, when building air conditioners are running full blast.
How Bad is NYC's Peak Demand?
The chart below shows the load duration curve for Con Edison (CECONY), which serves NYC and parts of Westchester. At the upper left corner of the curve is ConEdison's peak demand: about 13 gigawatts (or 130 million old-school 100W lightbulbs, if that helps).
Notice that the curve is steeper at the left, then flattens out as it moves right (i.e. the load duration gets longer).
The problem with peak demand is this steepness: the top 2 gigawatts, 15% of total demand--run less than 7 days per year, or less than 2% of the time. This gets expensive: transmission and distribution costs up to $840 per kW per year. The NYS PSC's REV recently estimated that cutting the top 100 hours of peak demand could save New York State up to $1.7 billion a year.
Like other capital-intensive endeavors, the electric grid is made possible by volume. This immense, expensive and resource-intensive infrastructure is worthwhile if it's in use say, the 2,000 "regular" working hours in a year (or better yet 24-7), because fixed infrastructure costs can be spread over more hours. By contrast, high peak demand means the capacity gets spread over fewer, very expensive hours.
Clipping peak demand reduces capacity requirements for the electric grid, which would ease the financial burden on utility rate payers, taxpayers, and future generations of New Yorkers seeking economic competitiveness. It could also help preserve our open space by reducing the need for new transmission lines.
What the Future Brings.
Unfortunately (see chart below) experts forecast peak demand to keep rising. Through a combination of energy efficiency, slowing population growth, and perhaps things like rooftop solar, average demand (total demand / annual hours) will stay flat or even slightly decline over the next 10 years. Peak demand, on the other hand, will continue to rise. Structural changes to the economy (more office workers on the same work-home schedule, for example), and the increased preference for climate controlled environments, are driving peak demand higher in New York City and other grids across the country.
The quick-and-dirty metric for demand "peakiness" (or inversely, grid efficiency) is called utilization factor: the ratio of average over peak. In NYC, utilization goes from ~60% in 2004 to ~45% in the 2024 forecast, a costly 25% reduction in efficiency. The supply-demand picture could be rendered even more troublesome by the increased penetration of intermittent renewables and the potential shut-down of large baseload power plants like Indian Point and Danskammer.
What Peak Power LLC is doing about it.
The problem is clear: peak demand in NYC ought to be slashed, on the order of gigawatts, asap. Efficiency, behavioral, and mechanical tweaks won't get us there; creating alternative, clean sources of peak power at NYC's major load centers (read: big buildings) will.
Stay tuned here, or better yet contact us to learn more!