Peak demand is the highest point of electricity consumption, usually occurring on hot summer afternoons when air conditioning use surges. Utilities must maintain enough generation capacity to meet peak demand plus a reserve margin. Peak events are expensive because they may require activating less efficient and more costly peaker plants. Managing peak demand through demand response programs, time-of-use pricing, and energy storage is a major focus of modern grid management.
Peak Demand
The maximum electricity consumption in a grid during a specific period, typically hot summer afternoons.
Related Terms
Demand Charge
A fee based on the maximum rate of electricity consumption (peak demand in kW) during a billing period.
Time-of-Use (TOU) Rates
Pricing that varies by time of day, with higher rates during peak demand hours and lower rates off-peak.
Base Load
The minimum level of electricity demand over a 24-hour period, typically supplied by always-on power plants.