definition:demand_charge_management [Sinexcel ESS knowledge base]

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====== Demand charge management ======
===== What is demand charge? =====

The demand charge is defined as the energy charge based on the highest demand, during any 15 to 30-minute interval that is measured in a billing period. 

In many cases, electricity use is metered (and billed) in two ways by the utility: 

  * first, based on your total consumption in a given month, 
  * and second, the demand, based on the highest capacity the user required during the given billing period, typically a 15-minute interval during that billing cycle.
Demand charge may be a fixed charge per kilowatt or divided into rate brackets: the highest charge on the first bracket, and lesser charges on the following brackets. The charge mode varies by different power companies. The integrator should optimize their algorithm to make the benefit maximized according to the site power supplier’s demand charge mode.

===== Demand charge management principle =====
Demand charge management is one typical application in behind-meter peak shaving in ESS industry. The ultimate target of demand charge management is to reduce the peak power read from the meter.

When the ESS is discharging the battery energy to the AC port, the power will compensate the energy drawn by the load, in the same time, the power read from the meter will be reduced.

When the ESS is charging, the power read from the meter will be increased. So the EMS should optimize the charging and discharging period, to make the electricity bill as low as possible.

There are several implement modes on sensor placement. The first way is adding an extra meter before the loads. The second way is adding an extra meter just behind the existing utility meter. 

Once the EMS reads a peak power rising edge, it shall calculate the target power of the inverter and send the command to the PWS2-30K, the PWS2-30K will discharge immediately. When the EMS found that the load is low enough, it shall command the inverter to charge the battery to store enough energy for the next power peak shaving. Although the specific algorithm depends on the integrator developer, the principle is still similar.

Demand charge management application requests fast response to the inverter, so the inverter should remain started continuously for instant dispatching.