How is a demand charge different from an energy charge?

An energy charge is based on total kilowatt-hours consumed. A demand charge is based on the measured rate of consumption during the applicable interval, so a short period of high load can affect the bill even when total consumption is unchanged.

What is the BC Hydro demand charge for my facility?

There is no single universal figure. Demand charges vary by BC Hydro rate schedule and customer classification. Check the demand line item on a recent bill and the applicable rate schedule.

How much peak demand can a battery actually remove?

The reduction is limited by battery power at the moment of the peak and by the energy available across its duration. A 1 MW battery cannot hold a 1 MW reduction for four hours without at least four MWh of usable energy and an appropriate state of charge.

Does peak shaving work on every load profile?

No. Short, infrequent peaks are the most favourable case. Broad, sustained plateaus require far more stored energy, and facilities with flat load profiles may have little demand-charge opportunity at all.

Energy monitoring and performance dashboard

Resources / Demand management

BC Hydro Demand Charges Explained: How BESS Can Reduce Peak Demand

Demand charges reward a facility for the shape of its load, not just the amount of energy it uses. This page explains how demand is measured, where battery energy storage changes the outcome, and where it does not.

Calculate Your Peak-Shaving Opportunity Request a BESS Assessment

Rate-specificDemand charges vary by BC Hydro rate schedule and customer classification. There is no single universal demand charge. Confirm the applicable charge on your own bill and rate schedule before using any figure in a project evaluation.

Terminology

The terms that decide the outcome

Most disagreements about whether a battery 'pays for itself' come down to how demand is measured rather than to the battery itself.

Demand charge: A billed component based on the facility's measured demand, separate from the energy consumed over the month.
Billing demand: The demand value the utility applies to the bill, which may differ from the instantaneous maximum depending on the rate schedule's measurement rules.
kW vs kVA: kW is real power; kVA is apparent power. Where demand is measured in kVA, reactive power and power factor affect the billed value.
Peak demand: The highest measured demand within the applicable measurement interval — commonly a 15-minute interval on interval-metered accounts.
Power factor: The ratio of real to apparent power. A poor power factor raises kVA for the same useful work and can raise a kVA-based demand charge.
Load profile: The time series of the facility's demand. Its shape determines whether peaks are short and sharp or long and sustained.
Peak shaving: Discharging stored energy during high-demand intervals so that metered demand stays below a target.
Behind-the-meter BESS: A battery installed on the customer side of the utility meter, serving the facility rather than exporting to the grid.

Mechanism

Why BESS Peak Shaving Works

During a high-load interval the battery discharges into the facility, so the meter records a lower demand. The saving is created at the measurement interval, not across the month.

Without BESS

Metered demand follows the facility peak.

With BESS

Stored energy covers the peak interval; metered demand stays at the target.

What makes a site favourable

01Peaks that are short relative to the battery's usable energy
02Predictable, production-driven peak timing
03A demand charge large enough for the reduction to matter
04Interval metering that makes the peak visible and verifiable
05Electrical capacity and space at a sensible point of connection
06An operating team able to keep the control strategy in service

What limits the result

01Sustained plateaus that exceed the battery's stored energy
02Peaks that arrive before the battery has recharged
03kVA-based billing where power factor is the dominant term
04Rate structures that measure demand differently than assumed
05Dispatch commitments under an incentive agreement that limit the reserve available for peak shaving
06Maintenance, derating and availability over the life of the system

Estimator

Calculate Your Peak-Shaving Opportunity

A first-order screen using your own demand and rate figures. It is a screening tool, not an engineering study.

Estimate a Peak-Shaving Opportunity

Enter measured demand, the demand charge from your rate schedule and a candidate battery configuration.

Monthly Peak Demand

Target Peak Demand

Demand Charge

$/kW

From your applicable rate schedule.

Battery Power

Battery Energy

kWh

Discharge Duration per Event

Estimated Annual Peak Events

events

Used as context for operating duty, not for the demand-charge estimate.

Estimated Project Cost (optional)

CAD

Preliminary estimate

Potential peak reduction—

Estimated monthly demand-charge reduction—

Estimated annual demand-charge reduction—

Estimated simple payback—

Annual peak events entered—

Peak reduction is limited by battery power and by the energy available across the stated discharge duration. Demand-charge outcomes depend on how measured demand is billed under the applicable rate schedule.

Preliminary estimate only. Actual results depend on rate schedule, load profile, demand measurement, operating strategy, battery availability and site conditions. No saving, payback or return on investment is guaranteed.

Questions

Demand charge and peak shaving FAQ

Independent energy service providerMotiraTech is an independent energy solutions provider. We are not affiliated with, endorsed by, sponsored by, or acting on behalf of BC Hydro.

Program eligibility, incentive amounts and final approval are determined by BC Hydro. The information on this page is provided for general guidance and does not constitute a BC Hydro approval or incentive commitment.

Official program resources

Links are provided to BC Hydro for reference only. Program documentation is maintained by BC Hydro and may change without notice.

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