In energy system operations, peak load conditions are difficult to avoid. Sudden spikes in energy consumption typically occur during specific hours or during extreme weather events.
These conditions increase stress on power systems, potentially driving up electricity costs and raising the risk of large-scale power outages (blackouts).
To address these challenges, peak shaving plants have emerged as an effective solution. This innovation helps maintain system stability, reduce blackout risks, and improve overall energy efficiency.
What Is a Peak Shaving Plant?
Peak shaving is a load management strategy designed to reduce peak demand during specific periods.
This approach helps relieve pressure on the power grid while also lowering electricity costs, particularly for large-scale consumers with high demand profiles.
In general, peak shaving serves two primary objectives:
- Maintaining power system stability
- Reducing electricity costs for large consumers
By minimizing sudden demand spikes, peak shaving helps prevent grid overloads and reduces the risk of blackouts.
Typically, electricity providers impose additional charges based on the highest level of power consumption recorded during a billing period, commonly known as demand charges.
By implementing peak shaving, peak demand can be lowered, resulting in more efficient and predictable electricity costs.
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How Does Peak Shaving Work?
One of the most widely used technologies for peak shaving today is the Battery Energy Storage System (BESS).
In a peak shaving application, BESS operates on a simple principle: batteries are charged when:
- System load is low (off-peak hours)
- Electricity tariffs are cheaper
- Renewable energy generation is high
When internal demand approaches peak thresholds:
- The automated control system initiates dispatch
- BESS supplies electricity directly to the facility load
- Power drawn from the grid remains below the peak limit
As a result, the demand peak is effectively “shaved” without disrupting operations.
BESS used for peak shaving is equipped with intelligent control systems that monitor load profiles, predict demand surges, and respond rapidly to keep power levels stable. This approach makes peak shaving more precise, automated, and reliable compared to conventional methods.
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Types of Peak Shaving Plants
Peak shaving solutions can be categorized based on their energy sources and response characteristics. Broadly, two main types are commonly used today.
1. Gas-Based Peak Shaving
Gas-based solutions play a critical role in managing long-duration or seasonal peak demand.
Key functions of gas-based systems include:
- Supplying large volumes of energy
- Maintaining system resilience during extreme demand spikes
- Supporting regions with heating needs or heavy industrial loads
In this setup:
- Natural gas or LNG is stored as a reserve
- During demand surges, LNG is regasified
- Gas is injected back into the pipeline network to maintain pressure and supply continuity
This approach is essential for ensuring energy system reliability, particularly when peak demand persists for extended periods and cannot be handled economically by battery storage alone.
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2. Electricity-Based Peak Shaving
This type relies on fast-responding and flexible electrical resources, making it ideal for daily peak shaving applications.
Key characteristics include:
- Near-instant response to load spikes
- Suitable for short-duration peaks
- Easy integration with existing power systems
Battery Energy Storage Systems (BESS) stand out as the most prominent solution because they:
- Utilize large-scale batteries (commonly lithium-ion)
- Can operate as standalone systems
- Deliver clean power with zero startup time
- Provide additional services such as frequency regulation and grid stabilization
BESS is often combined with renewable energy sources such as solar and wind power. Excess renewable generation is stored during periods of high output and later discharged for peak shaving, typically in the evening, thereby increasing the dispatchability and value of renewable energy.
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The Strategic Role of Peak Shaving Plants in Energy Systems
Peak shaving not only addresses cost issues but also plays a transformative role in tackling environmental challenges and system reliability. Its key contributions include:
Maintaining System Stability and Preventing Blackouts
By reducing demand spikes during peak periods, peak shaving helps to:
- Prevent grid overloads
- Maintain voltage and frequency stability
- Reduce thermal and electrical stress on grid assets
As a result, critical components such as transformers and distribution cables operate more safely, asset lifespans are extended, and the risk of large-scale system failures is significantly reduced.
Operational Efficiency and Cost Savings
Peak shaving reduces reliance on:
- Expensive and inefficient conventional peaker plants (diesel and gas-fired peaking units)
- High-cost backup system activation during demand surges
Over the long term, this approach enables power systems to operate more efficiently by lowering costs, reducing infrastructure strain, and ensuring supply reliability.
Supporting the Energy Transition
The strategic importance of peak shaving increases significantly when combined with BESS and renewable energy sources.
Energy storage allows surplus electricity from solar and wind generation to be stored during periods of abundant supply and reused when electricity demand rises.
This approach helps manage the inherent variability of renewables while maintaining stable and reliable power delivery.
Through this mechanism, peak shaving not only reduces demand spikes but also decreases dependence on fossil fuel–based peaker plants.
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The Role of LNG in Modern Peak Shaving Systems
While BESS serves as the primary solution for daily electrical peak shaving, Liquefied Natural Gas (LNG) plays a strategic role in gas-based peak shaving systems, particularly for managing large-scale and seasonal demand surges.
LNG enables gas system operators to maintain supply reliability when demand exceeds normal pipeline capacity.
Stored in liquid form, LNG allows large volumes of gas to be held efficiently. During peak demand periods, LNG is regasified and injected back into the pipeline network to supplement supply and stabilize system pressure.
With this reserve capacity, gas systems can avoid supply shortages that could disrupt residential consumption, power generation, or industrial processes, ensuring overall energy system stability.
References:
- Science Direct. Accessed 2025. The peak-shaving efficiency analysis of natural gas time-of-use pricing for residential consumers: Evidence from multi-agent simulation
- Department of Energy. Accessed 2025. Battery Energy Storage Systems Report
- Winfield Energy Malaysia. Accessed 2025. Understanding Peak Shaving: Malaysia’s Energy Game-Changer
- Kementerian ESDM. Accessed 2025. LIPI Kembangkan Smart Microgrid Technology untuk Wilayah Minim Listrik
