Investigating the use of standby generator sets to mitigate peak demand charges in industrial facilities

An analysis of the electricity rate structure can often reveal incentives for consumers to manage their load patterns judiciously so as to save on their bills. In Mauritius, the tariff applicable to industrial consumers heavily penalizes unusually high but brief peak demands. This paper investigates the feasibility of curtailing peak demand charges through the operation of the standby generator set, an expensive but underutilized resource present in industrial facilities. The electricity consumption in an engineering company was monitored during a two-year period to determine the load characteristics. It was found that net savings representing 6% of the total electricity costs could be achieved if the generator set supplied demands beyond 300 kVA. Furthermore, only three years of operation would be sufficient to recover the necessary capital investment. Thus, the proposed strategy represents a viable option to restrain the peak demand charges for local industrial consumers.