Peak shaving

A large commercial site pays for more than the units it imports. It also pays for the size of its demand. The highest power it draws, measured in kVA or kW, drives the capacity and available-capacity charges on the bill, and the most expensive distribution charges land in the network's peak red band. Trim the top off that demand curve and you trim those charges, without changing what the building actually does.

That is what peak shaving means. The battery sits behind your meter, watches the load, and discharges into the brief windows when demand spikes, so the grid sees a lower peak than the site is really drawing. This page sets out the mechanism for a finance or facilities director, and why a battery for peak shaving is sized on power and duration rather than on energy alone.

On a half-hourly metered site, the bill has two layers. There is the cost of the energy you import, charged per unit. Then there are the charges tied to your demand: the agreed capacity or available capacity you reserve with the network, charged whether you use it or not, and a penalty if you exceed it. Distribution Use of System (DUoS) charges add a further layer, and they are time-banded, with the highest unit rate falling in the network's red band during weekday peak hours.

Peak shaving goes after that second layer. By holding your metered peak down, it reduces the demand on which the capacity charge is set, helps you stay under your agreed capacity, and shifts import out of the red band. The energy still has to come from somewhere, so the battery charges when demand and DUoS rates are low and discharges when they are high.

The system meters your load continuously and discharges the battery the moment demand climbs toward your peak threshold, topping up the supply so the grid sees a flatter draw. When a chiller, compressor, oven bank or charging load all coincide, the battery covers the spike instead of the meter recording it. As demand falls away, the battery stops discharging and recharges later, in the cheaper, off-peak window.

The control logic is the heart of it. The system needs to recognise a genuine peak forming and commit stored energy to it, rather than spending the battery early and having nothing left when the real spike arrives. On a site with solar over 50 kWp, that same battery is also storing your own generation, so the peak-shaving job and the self-consumption job are designed to work together rather than compete.

A peak-shaving battery is specified differently from one bought purely to store solar. Two things drive it: how much power it can deliver at once, in kW, and how long your peaks last, which sets how much energy it has to hold to ride through them. A short, sharp spike needs high power for a few minutes. A broad afternoon plateau needs the battery to sustain its output for longer.

• Power rating has to match the size of the peak you want to remove, not the average load.
• Energy capacity has to cover the duration of the peak, so the battery does not run flat mid-spike.
• The shape of your real demand decides both, which is why we model it from your half-hourly data rather than a rule of thumb.

Our in-house insured drone survey and PV*SOL half-hourly modelling give us your actual demand profile, so the battery is sized to the peaks your site genuinely produces.

Peak shaving is an economic use case. It works by reducing demand-related charges and shifting import away from the most expensive band. The saving depends entirely on your tariff structure, your agreed capacity, your DUoS region and how spiky your load is, so we model it from your own data rather than quote a generic figure.

Because it touches the cost and return of the battery, the same caveat applies as to every economic case for storage. The capital-allowances treatment of standalone battery storage is not settled in public HMRC guidance, so we do not assert a specific allowance on it. Where a battery is part of a wider solar install, the position can differ, and either way it is one to confirm with your tax adviser. The page renders the formal disclaimer below.

Peak shaving used to chase the Triad: three half-hours of national winter peak that set the transmission demand charge. Ofgem's Targeted Charging Review (TCR) ended that. From April 2022 the transmission residual and most of the distribution residual moved to fixed bands set by your agreed capacity, so you can no longer dodge them by ducking a few winter evenings. The work a battery does now lands on the charges that are still genuinely demand-led: the agreed and exceeded-capacity charges your network sets in kVA, and the time-banded Distribution Use of System unit rates, where the red band still carries the dearest p/kWh on weekday peaks.

This matters for how a battery is justified. Aiming a shaving strategy at Triads on a post-TCR bill targets a charge that no longer moves, which is why we read your live network charging statement and your half-hourly data before promising the battery anything to bite on. Where your agreed capacity is set too high for your real peak, trimming the metered demand can also support a renegotiation of that figure with your network operator, lowering a fixed charge as well as the unit-rate one. We name the mechanism; the size of any reduction comes from your own tariff and load, modelled and disclosed, never a figure we carry in from another site.

Shaving a demand spike is a measurement problem before it is an energy one. The controller has to see the load rising and commit stored power inside the same settlement period the network bills you on, which is why it reads the site through current transformers at the supply point rather than from the inverter alone. Under the market-wide half-hourly settlement (MHHS) reform that the National Energy System Operator (NESO) and Ofgem are rolling out across GB, that half-hourly granularity is becoming the basis of more commercial settlement, so a battery whose dispatch already works to the half-hour is settling on the same clock the bill is calculated on.

The control layer that does this is the energy management system, the part that decides whether a battery shaves the genuine peak or wastes its charge on a false alarm. The engineering standards sit underneath it: IEC 62933 covers electrical energy storage system integration and the grid interface, BS 7671 governs the installation, and the connection is declared to your Distribution Network Operator under G99. We size the response from your real demand shape so the system holds reserve for the peak that binds your capacity charge, not the first ramp of the morning. The deeper detail on how that controller arbitrates competing jobs is on the EMS software page, and how the asset itself is dimensioned is on the sizing page.

A peak-shaving battery is rarely bought to shave alone, and the honest case treats demand-charge reduction as one layer in a stack rather than the whole return. The steadiest value is on-site: stored generation displacing expensive import, which is why solar self-consumption usually anchors the business case. Time-of-use arbitrage can add value where the tariff spread is wide enough to clear round-trip losses and cycle wear. Peak shaving trims the demand-related charges this page describes. Availability and flexibility income from the Capacity Market and grid services can then sit on top as a variable layer, accessed through an aggregator and subject to qualification.

These jobs can compete for the same stored energy, so the EMS has to decide, half-hour by half-hour, which earns most without leaving the battery flat when your binding peak forms. There is a real constraint behind that arithmetic: every cycle spends warranted life, and most stationary LFP products warrant a throughput in cycles or megawatt-hours over a term. Shaving a daily peak is a gentle, predictable cycle; chasing a thin arbitrage spread on top can add wear that outweighs the gain. We confirm the cycle warranty from the live datasheet for the specific product and set the dispatch so peak shaving is captured first, with the other layers added only where they pay after wear is netted off.

Because peak shaving is an economic case, the number in your proposal is built from your own data, with the assumptions on show. We start from your half-hourly consumption export, your current network charging statement and your supply tariff, and model the shaved demand profile in PV*SOL against an in-house insured drone survey. From that we show how far a given battery power rating would pull the metered peak down, how often it would be called, and what that means for your agreed-capacity and red-band exposure. Any saving, payback or return is modelled and market-dependent, not promised: it moves with your tariff, your DNO region, the band rates and how spiky your load really is.

We also stay honest on tax. The capital-allowances treatment of standalone battery storage is not settled in public HMRC guidance, and where a battery is part of a wider solar install the position can differ, so we set out the qualitative case and direct the specifics to your accountant or tax adviser before you commit. The capital figure itself is survey-led rather than a headline rate; the basis is on our battery storage costs page and in the wider commercial solar cost guide. The point of the model is that you can see the assumptions and stress them, rather than taking a saving on faith.